




COPYRIGHT DEPOSIT. 

















IOWA LAW RELATING 


TO 


Collateral Inheritance Tax 


A complete compilation of the Iowa Statutes ^relating to 
Collateral Inheritance Tax with Annotations 
from the Courts of Iowa and 
New York 


Including excerpts from Treaties now existing between 
the United States and Foreign States 


/ 


/ 


EDITED BY B. J. POWERS 


OF 


DES MOINES 



Publisned by 

THE STATE OF IOWA 
DES MOINES 









Copyright, 1918 

by 

STATE OF IOWA < 


AUG-! 1318 ■ 


©CIA49S996 



Y 


PREFACE. 

A Collateral Inheritance Tax Law has been in force in Iowa 
for twenty-two years. During this time, as is the case in all 
similar laws, many legal questions as to its interpretation have 
arisen and have been decided by the courts. 

I am convinced that a compilation of the Collateral Inherit¬ 
ance Tax Laws, and a digest of the cases relating thereto, is not 
only necessary to the proper administration of this office, and 
those interested with it in the collection of the Collateral Inherit¬ 
ance Tax, but will be of incalculable assistance to administrators, 
executors, and attorneys generally throughout the State who 
might be interested in the operation of this law - r so, with the ap¬ 
proval of the Executive Council of Iowa, I have had this pam¬ 
phlet prepared. 

It contains the Iowa Collateral Inheritance Tax Law and all 
important decisions relating to collateral inheritance taxation 
generally. 

E. H. HOYT, 

Treasurer of State. 


EDITOR’S NOTE. 

This compilation contains the entire statute law of the State 
of Iowa upon matters relating to the Imposition and Collection 
of the Collateral Inheritance Tax. In addition it reviews every 
case decided by our supreme court on the subject. 

The sections have been annotated in as brief and concise man¬ 
ner as possible in keeping with an authentic review of the facts 
and points decided. Annotations from the courts of New York, 
Massachusetts, Michigan, Minnesota and other states have been 
given to assist in getting a proper view of the general rule of 
American courts on this subject. 

Forms have been prepared to the end that there may be uni¬ 
formity of procedure in the imposition and collection of the tax. 

No attempt has been made to answer every possible question 
that might arise, but such matters have been considered as are 
of common occurrence and of real importance. 



CONTENTS. 


CHAPTER I 

Inheritance Tax—Its History—Kinds of Tax—Early Iowa Statutes. 

CHAPTER II 

Property and Persons Subject to the Tax—Rate of Tax, etc. 

CHAPTER III 

When Tax is Not to be Imposed or Collected—Exemptions and Deductions. 

CHAPTER IV 

Assessment and Collection of the Tax—Computation of the Tax—When 
and Where Paid—Refunds. 

CHAPTER V 

Treaties with Foreign Nations—Effect on Iowa Laws relating to Inherit¬ 
ance Tax. 


Table of Cases decided by the Iowa Supreme Court Relating to Collateral 
Inheritance. 



CHAPTER I 


INHERITANCE TAX—ITS HISTORY—KINDS OF TAX- 
EARLY IOWA STATUTES. 

Early Inheritance Tax—Inheritance tax is said by Gibbon, the his¬ 
torian, to date back to the days of Emperor Augustus, and that he sug¬ 
gested it to the Roman senate as a means of supporting the army, and 
that it was imposed at the rate of five per cent upon all legacies or 
inheritance above a certain value, but that it was not collected from the 
nearest relatives upon the father’s side; and that it was fruitful as well 
as comprehensive. 1 Gibbon’s Rome, 133. 

Another writer tells us that Augustus “worked the trick of finding the 
proposal” for inheritance tax “among Caesar’s papers,” which are now con¬ 
sidered as having been forged, and that he succeeded in getting the 
Roman senate’s approval to the law in 44 B. C. Bender’s Federal Revenue 
Law, page 96. 

Mr. Max West in his scholarly work on “Inheritance Tax”, page 11, 
tells us that the Romans probably borrowed the idea of inheritance tax 
from the Egyptians, with whose financial methods they were well ac¬ 
quainted. Continuing he states: “There is evidence that Egypt had some 
sort of an inheritance tax at this time (6*54-616 B. C.), of which the rate 
was probably not less than a tenth, and from which even direct heirs were 
not exempt. A papyrus has been found which relates that a certain 
Hermias was sentenced to pay a heavy penalty for failing to pay the tax 
on succeeding to his father’s house. Another inscription records a sale 
of property by an old man to his sons at a nominal price, apparently 
for the purpose of evading the inheritance tax.” Hence schemes to 
evade the tax are nothing new to the world as disclosed by the records 
just referred to. 

Federal Inheritance Tax—It is well for all persons interested in an 
estate exceeding in value the net sum of $50,000.00 to see to it that the 
federal inheritance tax is paid. Failure to report such an estate for 
taxation results in additional penalties and under certain conditions a 
fine or imprisonment may be assessed. For further information see Act 
of Sept. 8, 1916, c. 463 sec. 200 as amended by Act of March 3, 1917, c. 159, 
sec. 300 and by Act of October 3, 1917, c. 63, sec. 901; United States 
Compiled Statutes, Title 35, Chap. Ten A, and 1917 Temporary Supple¬ 
ment. In considering the “debts” of an estate the rule, as announced 
by the Court, of Appeals of New York, is that the federal inheritance tax 
is not to be deducted as a debt of the estate. It is not a tax upon the 
property but a tax on the right of the beneficiary’s succession thereto. 
Matter of Gihon 169 N. Y. 443; 62 NE. 561. 

Taxes due a state are not to be deducted as “debts” of an estate in 
estimating the value of an estate for the purposes of the Federal In- 


6 


COLLATERAL INHERITANCE TAX LAW 


heritance Tax. Such was the ruling of the Treasury Department under 
date of September 1, 1917. 

This compilation is not intended to cover any features of the Federal 
Inheritance Tax statutes and therefore those interested in estates sub¬ 
ject to such a tax should consult the statutes. 

Kinds of Inheritance Tax—In many states, laws similar to those of 
Iowa are designated as “transfer tax laws,” “legacy tax laws” and some¬ 
times the tax required by such statutes are spoken of as “probate duties” 
or again “death duties.” The laws yary in their application but in general 
the intention is to provide that the state may collect a certain per cent 
of the value of the property transferred as a succession tax. By the 
term “succession tax” it is meant a tax on the right to take property on 
the death of another. This tax is uniformly held to be a tax, not upon 
the property, but a tax on the right of succession thereto. In Re Estate 
of Stone, (1906) 132 Iowa 136: 109 NW. 445; 10 Ann. Cas. 1033. 

In Iowa the tax is not collected from direct heirs, (except as provided 
in sec. 1481-a42, Supplement, 1913, page 41 hereof) but is collected in 
case the one entitled to the property is a collateral heir, or a stranger 
in blood to the decedent. In many states this succession tax is collected 
from everyone who derives any interest from the estate of the decedent, 
including the widow and the children. In some states, an exemption of 
$10,000.00 is allowed to the widow and to each of the children. 

There is a growing tendency to increase the amount of this tax and to 
include a greater number of persons within its provisions. Such laws 
are on the statutes of some thirty-six or eight of our states, and the 
succession tax is fast becoming a source of great revenue. 

Source of Iowa Collateral Inheritance Statutes—The early Iowa 
statutes on collateral inheritance were modeled after those of the state 
of New York, and therefore the decisions of the New York courts are of 
great value to the courts of this state in interpreting our statutes. In 
view of this fact, an endeavor has been made to give some authority from 
the courts of New York aiding in the interpretation of each section. 
Since the enactment of the Iowa statutes, New York has made a number 
of important changes in her laws on such taxation. 

It may bei of interest to learn that Utah has copied the Iowa statute 
almost in its entirety. See Title 36, sec. 1220X of Compiled Statutes of 
Utah and also case of Dixon v. Ricketts, 26 U. 215; 72 Pac. 47. 

In 1896, the 26th G. A. of Iowa, passed an act consisting of fifteen 
sections relating to collateral inheritance tax. These were inserted into 
the Code of 1897 under Title VII. Chap. 4, sections 1467 to 1481 inclusive. 
This law' was held to be unconstitutional for the reason that no notice 
of appraisement was provided for, or required to be given, to the heirs, 
devisees or others interested in the estate, as to the time or place when 
the property of the estate would be appraised. See Ferry v. Campbell, 
(1900) 110 Iowa 290; 81 NW. 604; 50 L. R. A. 92. However, before this 
case was decided by the supreme court, the 27th G. A. enacted a pro¬ 
vision for notice and removed the objection to the unconstitutionality of 
the act. Hence, when the supreme court reached the appeal in Ferry v. 
Campbell, swpra, it held that while the lower court was right in holding 


HISTORY AND KINDS OF TAX 


7 


the act unconstitutional at the time of trial, yet since the objection had 
thereafter been removed by competent legislation, the supreme court 
would reverse the lower court and hold the act to be in accord with our 
constitution. 

There were a number of changes made from time to time in the 
various provisions of this act up until the year 1911 when the 34th G-. A. 
by enactment of Chap. 68, repealed all former statutes and amendments, 
except eight sections spared in the Code of 1897, and enacted as sub¬ 
stitutes therefor forty-eight new sections on the same subject. Two of 
these sections, numbers one and twenty-four, have been amended by 
having additions made thereto but otherwise the act still remains as 
originally enacted. The foregoing constitutes the entire statute law of 
Iowa upon the subject of collateral inheritance. 

But in case an alien is involved, whether as testator, legatee or heir, 
it should be remembered that the provisions of any treaty existing be¬ 
tween the United States and such alien’s country is to take precedence 
over any statutes of the state of Iowa. The matter of Treaties is con¬ 
sidered in a separate chapter in this work and should be referred to 
when dealing with the rights of an alien. 

The Right of a State to Levy the Tax—In dealing with the subject 
of collateral inheritance it should be remembered that the right to 
inherit, or to take by will, and the right to devise and bequeath property 
are not natural and inalienable rights, nor are they guaranteed by the 
state or federal constitutions, but are entirely within the control of each 
state. United States v. Perkins, 163 U. S. 625; 16 Sup. Ct. 1073; 41 L. Ed. 
287; Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 18 Sup. Ct. 
594; 42 L. Ed. 1037. 

Furthermore, since the matter of inheritance is a right acquired solely 
by virtue of law; in fact, it is a creature of the law, there is no valid 
reason to be brought forth denying a sovereign state authority from mak¬ 
ing any restriction it may see fit to place upon the right of succession. 
Hence, it has authority to discriminate between resident and non-resi¬ 
dent aliens; between direct relatives' of a decedent as children and grand¬ 
children, and more distant relatives as cousins, etc., and levy a tax ac¬ 
cordingly. 

Property held to be exempt from the ordinary taxing jurisdiction of a 
state does not necessarily bar the state from levying its inheritance tax. 
“The foundation upon which such acts rest is different from that which 
exists where the assessment is levied upon property. The succession or 
inheritance tax is not a tax on property * * Knowlton v. Moore, 

178 U. S. 41; Buck v. Beach, 206 U. S. 392; 27 Sup. Ct. Rep. 712; 51 L. 
Ed. 1106. 

Review of the Decisions Under the First Section of the Original Ac.— 
In the original act the persons subject to the tax, the exceptions thereto, 
and the rate of the tax were all fixed by Sec. 1467 of the Code, 1897. This 
section is now repealed but prior to the time it was stricken from the 
statutes many important decisions were rendered by the supreme court 
interpreting it which are now of vast importance in getting at the true 
import of our present statutes. 


8 


COLLATERAL INHERITANCE TAX LAW 


Therefore Section 1467 of the Code is set forth at length and a few of 
the decisions under its provisions are here digested. The section pro¬ 
vided: 

“All property within the jurisdiction of this state, and any interest 
therein, whether belonging to the inhabitants of this state or not, and 
whether tangible or intangible, which shall pass by will or by statutes of 
inheritance of this or any other state, or by deed, grant or sale or gift 
made or intended to take effect in possession or in enjoyment after the 
death of the grantor or donor, to any person in trust or otherwise, other 
than to or for the use of the father, mother, husband, wife, lineal de¬ 
scendant, adopted child, the lineal descendant of an adopted child of a 
decedent, or to or for charitable, educational or religious societies or in-„ 
stitutions within this state, shall be subject to a tax of five per centum 
of its value, above the sum of one thousand dollars, after the payment 
of all debts, for the use of the state; and all administrators, executors 
and trustees, and any such grantee under a conveyance, and any such 
donee under a gift, made during the grantor’s or donor’s life, shall be 
respectively liable for all such taxes to be paid by them, respectively, 
except as herein otherwise provided, with lawful interest as hereinafter 
set forth, until the same shall have been paid. The tax aforesaid shall 
be and remain a lien on such estate from the death of the decedent until 
paid.” 

NOTE 1 —(That part of the preceding section appearing in italics has 
been specifically defined or considered by the supreme court.) 

One of the first cases that arose under this section was In Re Estate 
of McGhee v. State of Iowa, (1898) 105 Iowa 9; 74 N. W. 695, which held 
that the words ‘‘to any person,” though used in the singular should be 
construed to include more than one when required to give the statute the 
effect it was intended to have; that the word “value” when taken in 
consideration with the terms “appraised value,” “actual market value” 
and “value” without qualification, means the “fair market value” and 
not, the assessed value for the purpose of ordinary taxation; “above the 
sum of one thousand dollars, after the payment of all debts ” refers to 
the debts of the decedent and not to those of each legatee or heir. 

The case of Herriott v. Bacon, (1900) 110 Iowa 342; 81 N. W. 701, held, 
that the words “above the sum of one thousand dollars” meant that all 
estates of less than one thousand dollars in value after payment of debts 
were to be exempted, but when the value of the estate exceeds one 
thousand dollars, all property passing to collateral heirs is subject to the 
tax. 

The case of Gilbertson v. McAuley, (1902) 117 Iowa 522; 91 N. W. 788, 
adheres to the interpretation of the words “above the sum of one thousand 
dollars ” given in the case of Herriott v. Bacon, supra. Reaffirmed in 
Morrow v. Durant, (1908) 140. Iowa 437*; 118 N. W. 781. 

The supreme court, in Re Weaver’s Estate, (1900) 110 Iowa 328; 81 
N. W. 603, held, that where a resident of Iowa died owning cattle in Mis¬ 
souri which he willed to collateral heirs that neither the cattle nor the 
proceeds derived from their sale was subject to the Iowa collateral in¬ 
heritance tax under the provision that “ all property within the jurisdic- 


HISTORY AND KINDS OF TAX 


9 


tion of this state,” etc., should be liable for the tax. This was held to be 
the rule even though the executor sold the cattle and brought the pro¬ 
ceeds into this state for distribution. This certainly would not be the 
present rule in view of Sec. 1481-a of the Supplement 1913 rf (page 10 
hereof) which expressly provides that property brought into this state 
“for distribution” is subject to the tax. 

At the same term of court (January, 1900) that the cases of Her- 
riott v. Bacon, supra, and In Re Weaver's Estate, supra, were decided the 
case of Ferry v. Campbell, (1900) 110 Iowa 290; 81 N. W. 604; 50 L. R. A. 
92, came on for hearing. The constitutionality of the collateral inherit¬ 
ance tax law was attacked on the ground that it deprived one of his 
property without due process of law, in that no notice of appraisement 
was provided for, or required to be given to the heirs, legatees or dev¬ 
isees of the time or place of appraisement. This contention was sus¬ 
tained by the trial court and the act declared to be unconstitutional. 
The case was then appealed but before it came on for hearing the 27 
G. A., by the passage of Chap. 37, provided for notice of appraisement to 
be given to those interested and removed the objectional feature of the 
law. The supreme court then held that while the judgment of the lower 
court was correct in holding the law unconstitutional at the time the 
decree was rendered, yet that finding ought to be reversed and the law 
declared to be constitutional on account of the enactment of the amend¬ 
ment pending the appeal. 

This decision further recognizes in dictum that it was possible for real 
estate to have become completely vested under the unconstitutional law 
in the heirs and to be free from the tax; but as to personal property 
yet in the hands of the court, the opinion was given that it would be 
still subject to the tax. 

The dictum in Ferry v. Campbell, supra, soon proved to be a source of 
litigation for in Herriott v. Potter, (1902) 115 Iowa 648; 89 N. W. 91, 
the defendant successfully resisted the collection of the collateral in¬ 
heritance tax on real estate where the owner died after the enactment of 
the original statute on collateral inheritance tax, (which was unconstitu 
tional as pointed out in Ferry v: Campbell, supra,) but before the cura¬ 
tive amendment passed by the 27 G. A. chap. 37. The court holding that 
real property descends and vests in the heirs at the time of the decedent’s 
death, hence if there was no valid law requiring the payment of col¬ 
lateral inheritance tax, at the time of the death, it would pass free from 
the tax. 

Again the supreme court in the case of Montgomery v. Gilbertson, 
(1907) 134 Iowa 291; 111 N. ‘W. 964, followed the dictum in Ferry v. 
Campbell, supra, and held that personal property then in the control of 
the probate court was subject to the tax even though the decedent’s death 
occurred prior to the time the 27 G. A. passed the curative amendment 
to the original collateral inheritance tax statute, thus making it con¬ 
stitutional. 


i 


CHAPTER II 


PROPERTY AND PERSONS SUBJECT TO THE TAX—RATE 
OF TAX—ETC. 

Property Subject to the Tax—Rate—When to be Paid—Lien— 
Who to Release Lien —Sec. 1481-a, Supplement, 1913, as amended* 
by 35 G. A. chap. 120. The estates of all deceased persons, 
whether they be inhabitants of this state or not, and whether 
such estate consists of real, personal or mixed property, tangible 
or intangible, and any interest in, or income from any such es¬ 
tate or property, which property is, at the death of the decedent 
owner, within this state or is subject to, or thereafter, for the 
purpose of distribution, is brought within this state and becomes 
subject to the jurisdiction of the courts of this state, or the pro¬ 
perty of any decedent, domiciled within this state at the time of 
the death of such decedent, even though the property of such 
decedent so domiciled was situated outside of the state, except 
real estate located outside of the state passing in fee from the 
decedent owner, which shall pass by will or by the statutes of 
inheritance of this or any other state or country, or by deed, 
grant, sale, gift, or transfer made in contemplation of the death 
of the donor, or made or intended to tdke effect in possession 
or enjoyment after the death of the grantor or donor, to any 
person, or for any use in trust or otherwise, other than to or 
for the use of persons, or uses exempt by this act shall be subject 
to a tax of five (5) per centum; provided, however, that when 
property or any interest therein shall pass to heirs, devisees or 
other beneficiaries subject to the tax imposed by this act who 
are aliens, non-residents of the United States, the same shall be 
subject to a tax of twenty (20) per centum of its true value ex¬ 
cept when such foreign beneficiaries are brothers or sisters of 
the decedent owner, when the rate of tax to be assessed and col¬ 
lected therefrom shall be ten (10) per centum of the value of the 
property or interest so passing. Any person beneficially entitled 
to any property or interest therein because of any such gift, leg¬ 
acy, devise, annuity, transfer or inheritance, and all adminis 
trators, executors, referees and trustees, and any such grantee 


PROPERTY AND PERSONS SUBJECT TO TAX 


11 


under a conveyance, and any such donee under a gift, and any 
such legatee, annuitant, devisee, heir or beneficiary, shall be re¬ 
spectively liable for all such taxes to be paid by them respect¬ 
ively. The tax aforesaid shall be for the use of the state, shall 
accrue at the death of the decedent owner, and shall be paid to 
the treasurer of state within eighteen ( 18 ) months thereafter, 
except when otherwise provided in this act, and shall be and 
remain a legal charge against and a lien upon such estate, and 
any and all of the property thereof from the death of the dece¬ 
dent owner until paid. (*) Real estate sold under order of 
court shall be released from the lien imposed by this act and the 
lien shall attach to the proceeds of such sale, provided, that prior 
to the approval of such sale there shall have been given by the 
person making such sale a good and sufficient bond conditioned to 
secure the payment of all tax secured by the lien so released. 
This provision shall not be construed to relieve from personal 
liability any person owing such tax or whose duty it is to collect 
any pay such tax to the treasurer of state. • 

Unknown heirs, or heirs whose addresses are unknown, are subject 
to the inheritance tax whether they be direct or collateral. See Sec. 
1481-a42 of the Supplement, 1913, as set forth on page 41 hereof. 

Definition of “Tangible Property” and “Intangible Property”—The 
statute of Iowa does not define tangible or intangible property, nor are 
there any decisions directly in point from the supreme court of this 
state, except Hoyt v. Keegan, Administrator, decided May 13th, 1918, 
(unreported at the time of making this compilation.) In New York, 
both species of property are defined by statute. 

NEW YORK. 

“The words ‘tangible property’ as used in this article shall be taken 
to mean corporeal property such as real estate and goods, wares and mer¬ 
chandise, and shall not be taken to mean money, deposits in bank, shares 
of stock, bonds, notes, credits or evidences of an interest in property 
and evidences of debt.” 

“The words ‘intangible property’ as used in this article shall be 
taken to mean incorporeal property, including money, deposits in bank, 
shares of stock, bonds, notes, credits, evidences of an interest in prop¬ 
erty and evidences of debt.” Sec. 243, Tax Law of the State of New 
York, 1917. 

When “Property Within This State”—In General—Notes and Mort¬ 
gages_Agency—An analysis of the various decisions on what consti¬ 

tutes “property within the state” discloses two theories. The first one 
is based on the maxim Mobilia Persoifam . Sequuntur (movables follow 

(♦) The remainder of this section was added by the 35th G. A. chap. 

120 . 



12 


COLLATERAL INHERITANCE TAX LAW 


the person), and the second theory is that if a claimant must come within 
the jurisdiction of a state to enforce his right to possession or enjoy¬ 
ment, or to perfect his title, or interest, in property, regardless of the 
location of the property or of the evidence thereof, he has property within 
the state and subject to the taxing jurisdiction thereof. 

To the first theory, the objection is raised that it allows the right to 
succession to a great deal of property to escape taxation. To the second 
theory, the objection is made that it results in double taxation; being sub¬ 
ject to tax at the creditor’s domicile, as well as at the debtor’s domicile. 
But since there is no provision in the federal constitution preventing 
such taxation, it is the theory now being adopted in many states. 

It should be noted that the Iowa court in one of its first opinions,* 
Gilbertson v. Oliver* (1906) 129 Iowa 568; 4 L. R. A. (ns) 953; 105 N. 
IW. 1002, adhered to the rule first announced. But this case has been 
in effect overruled by the decision in Hoyt v. Keegan, Administrator, 
(decided May 13th, 1918,) and the rule of Massachusetts and Minnesota 
adopted. This is in conformity with the modern trend of decisions. 

In the case of Gilbertson v. Oliver, (1906) 129 Iowa 568; 4 L. R. A. (ns) 
953; 105 N. W. 1002, the supreme court of this state held that certificates 
of deposit, notes and mortgages and other evidences of indebtedness due 
and owing from residents of this state which were owned and held by a 
non-resident at her domicile in New Hampshire were not subject to the 
collateral inheritance tax of this state. The court adhered to the view 
that the situs of personal property of the nature of notes and evidence 
of indebtedness was at the domicile of the creditor and not that of the 
debtor. It should be noted that the defendant paid a tax on succession 
to shares of stock in the Onawa Bank of this state without question. 
This case was decided in 1906 prior to the enactment of a broader stat¬ 
ute on the same subject. 

T n re Estate of Culver, (1909), 145 Iowa 1; 123 N. W- 743, it was 
held shares of stock in the State Savings Bank of Council Bluffs 
owned by the decedent, Culver, who was a resident of Kansas was sub¬ 
ject to the collateral inheritance tax of Iowa. The court distinguished 
this proposition from ownership of notes, etc., by a non-resident as 
pointed out in Gilbertson v. Oliver, supra, and held that shares of stock 
represent an interest in property; that since the corporation was or 
ganized under laws of Iowa, and was located and doing business within 
the state that it, and the property it possessed was “within the jurisdic¬ 
tion of this state.” Since the decedent had an interest, evidenced by 
shares of stock in said property, he had property within this state and 
that the right of succession thereto by collateral heirs was subject to the 
tax. This was announced as the rule even though the shares of stock 
were held by decedent at his domicile in Kansas. A tax was also levied 
on the right of succession to an ordinary bank deposit in this case. 

Later on, the court somewhat broadened the scope of this statute in 
its opinion in Re Estate of Adams, (1914) 167 Iowa 382; 149 N. W. 531. 

This case is one of the most interesting as well as one of the most 
important opinions to be found in Iowa on the question of collateral 
inheritance. Briefly the facts are these: Hannah H. Adams left a will 
disposing of her entire estate to collateral heirs and was at the time 


PROPERTY AND PERSONS SUBJECT TO TAX 


13 


of her death, and for many years prior thereto a resident of the state 
of Florida. Prior to removing to Florida she resided in Waukon in the 
statei of Iowa, and one Hendrick acted as her agent at Waukon in nego¬ 
tiating and caring for many loans which had been made for her in that 
place. The notes and the mortgages were either in the possession of her 
agent, Hendrick, or were in the possession of an officer of The Waukon 
State Bank. Furthermore one of the officers of the bank had a power 
of attorney from Mrs. Adams, authorizing him to cancel and release any 
mortgages of record appearing in the name of Mrs. Adams. On the 
3rd day of August, 1904, Hendrick received instructions to secure all 
of the notes and mortgages and to take them to Chicago where Mrs. 
Adams was, she having gone to Chicago for the purpose of receiving 
medical attention. On the 4th day of August, 1904, Mrs. Adams redeliv¬ 
ered the notes and mortgages to Hendrick who returned home, stopping 
on his way at Prairie du Chien, Wisconsin, and depositing the notes and 
mortgages in a bank at that place for safe keeping. Prairie du Chien 
is just across the Mississippi River from Waukon, and is the nearest 
point by rail from the latter place. On the 6th day of August, 1904, 
Mrs. Adams died in Chicago. Her estate was administered upon in the 
state of Florida. The state of Iowa contended that the notes and 
mortgages which had been removed from Waukon were subject to the 
collateral inheritance tax of this state. 

As a general rule personal property follows the person, and for the 
purpose of taxation is assessable at the domicile of the owner, but if the 
creditor establishes an agency in another state than that of his domi¬ 
cile such securities as are in the possession of the agent are “within 
the jurisdiction” of the foreign state for the purpose of taxation, this 
is the rule, although the securities may be temporarily withdrawn from 
the situs of the agency. In this particular case the supreme court said 
“there can be no doubt in our minds that this transaction was had to 
avoid our collateral inheritance tax laws, and that Hendrick still re¬ 
tained control over the securities and either received payments thereon 
or was authorized to do so until the revocation of his authority by the 
death of Mrs. Adams.” 

Continuing the opinion states: “The supreme court of the United 
States in the case of Bristol v. Washington County, 177 U. S. 133, 20 
Sup. Ct. 585, 44 L. Ed. 701, approved the following: For many purposes 
the domicile of the owner is deemed the situs of his personal property. 
This, however, is only a fiction, from motives of convenience, and is not 
of universal application, but yields to the actual situs of the property 
when justice requires that it should. It is not allowed to be controlling 
in matters of taxation. Thus corporeal personal property is conceded 
to be taxable at the place where it is actually situated. A credit, which 
cannot be regarded as situated in a place merely because the debtor re¬ 
sides there, must usually be considered as-having its situs where it is 
owned—at the domicile of the creditor. The creditor, however, may give 
it a business situs elseww'here, as where he places it in the hands of an 
agent for collection or renewal, with a view to reloaning the money and 
keeping it invested as a permanent business.’ * * * ‘Now, here was 
property within this state, not for a mere temporary purpose, but as 


14 


COLLATERAL INHERITANCE TAX LAW 


permanently as though the owner resided here. It was employed here 
as a business by one who exercised over it the same control and man¬ 
agement as over his own property, except that he did it in the name 
of an absent principal. It was exclusively under the protection of the 
laws of this state.” 

Therefore since the possession of the notes and mortgages in Rie Adams’ 
Estate were in the constructive custody of Hendrick, even though at the 
time of the decedent’s death actually situated outside of the state of 
Iowa, they were to be considered as being within this state and sub¬ 
ject to the tax. 

This case is supported by many citations from New York as well as 
from the Supreme Court of the United States. 

By virtue of the decision in Hoyt v. Keegan, Administrator, (decided 
May 13th, 1918) the Iowa supreme court adopted the view expressed in 
the case of Blackstone v. Miller, infra , and therefore the rule followed in 
Massachusetts, Michigan and Minnesota is in effect the rule of' this 
state. In the case of Blackstone v. Miller, 188 U. S. 189; 47 L. Ed. 439; 
23 Sup. Ct. Rep. 277, the rule was announced that if the laws of the 
state are necessary, or may be invoked, to enforce the collection of the 
indebtedness, there is property “within the state” and subject to the 
taxing power of that state regardless of the domicile of the creditor, or 
the actual physical situs of the evidence of indebtedness. 

MASSACHUSETTS. 

This rule finds support in the case of Kinney v. Stevens, 207 Mass. 
368; 93 N. E. 586; 34 L. R. A. (ns) 784, where certain promissory notes 
secured by mortgages upon real property within the state of Massa¬ 
chusetts were held to be subject to the tax of that state even though 
the notes were in the possession of the decedent at his domicile in New 
Hampshire. This case was decided in 1911. 

The more recent case of Bliss v. Bliss, 221 Mass. 201; 109 N. E. 148; 
L. R. A. 1916A, 889, approves of the doctrine announced in Blackstone 
v. Miller, supra , and Kinney v. Stevens, supra, and holds that a regis¬ 
tered bond of the commonwealth of Massachusetts owned by a non-resi¬ 
dent and kept at his domicile is subject to the succession tax of that 
state. The court holding that the bond could not be collected by any 
process in the. courts except by invoking the Massachusetts law; that 
in order to convey complete title to the bonds, it was necessary to com¬ 
ply with the laws of that state in the matter of registering the bond 
and that the same could be taxed in that state under the theory that 
it was property “within the' state.” This case was decided in 1915 and 
is in accord with the late decisions of many states on this subject. 

See, also, Greves et al. v. Shaw, 173 Mass. 205; 53 N. E. 372. 

MICHIGAN. 

The state of Michigan, which has copied the statutes of New York in 
regard to the inheritance tax, has a line of authorities criticizing the 
case of Gilbertson v. Oliver, (1906) 129 Iowa 568; 4 L. R. A. (ns) 953; 
105 N. W. 1002, and holding that notes secured by mortgages upon land 
within the state of Michigan, even though the notes are held at the 


PROPERTY AND PERSONS SUBJECT TO TAX 


15 


domicile of the owner in another state at the time of his death, are 
subject to the tax of the state of Michigan as being property “within 
the jurisdiction of this state.” In Re Estate of Rogers, 149 Mich. 305; 
112 N. W. 931; 11 L». R. A. (ns) 1134; Re Merriam, 147 Mich. 630; 9 L. 
R. A. (ns) 1104; 111 N. W. 196, decided in 1907. 

In the case of Re Estate of Rogers, supra, the court said, “it is clear 
the mortgagee named in the mortgage could not preserve his lien on 
the real estate against creditors and subsequent purchasers without com¬ 
plying with the registry law of the state. If the debts secured by the 
mortgages are) not paid, they cannot be collected without the aid of the 
laws of tne state. The estate of Mr. Rogers cannot be properly admin¬ 
istered and closed without ancillary letters of administration obtained 
under the laws of this state.” 

Further the court states, “What gives the debt validity? Nothing 
but the fact that the law of the place where the debtor is will make him 
pay. It does not matter that the law would not need to« be invoked in 
the particular case. Most of us do not commit crimes. Yet we never¬ 
theless are subject to the criminal law, and it affords one of the mo¬ 
tives for our conduct. So, again, what enables any other person to collect 
the debt? The law of the same place.” 

The Michigan courts recognize the maxim of Mobilia Personam Se- 
quuntur (.movables follow the person) but that “when logic and the 
policy of a state conflict with a fiction due to historical tradition, the 
fiction must give way.” Therefore, when there is personal property 
within the state, as the rights acquired by virtue of a mortgage, the 
state of Michigan assesses the tax regardless of the domicile of the 
owner. This is in conformity to the rule of Massachusetts. Re Estate 
of Rogers, supra. 

See also Re Stanton’s Estate, 142 Mich. 491; 105 N. W. 1122. 

MINNESOTA. 

In State v. Probate Court, 128 Minn. 371; 150 N. W. 1094, a tax on 
succession to bank stock, in both state and national banks, to stock in 
a lumber company, to a promissory note, and to book accounts was sus¬ 
tained, although the decedent owner was a resident of Pennsylvania. 

NEBRASKA. 

In Douglas County v. Kountze, 84 Neb. 501; 121 N. W. 593, a tax 
was levied on the right to succession of certain shares of stock in a 
Nebraska corporation even though the certificates were then in the hands 
of trustees in the state of New York. 

NEW JERSEY. 

See case of Dixon v. Russell, 73 Atl. 51. 

NEW YORK. 

There were three cases decided by the New York Court of Appeals on 
the 6th of October, 1896, which have been quoted from and followed in 
many states. Iowa being among the number. 


16 


COLLATERAL INHERITANCE TAX LAW 


The first one in Re Whiting’s Estate, is reported in 150 N. Y. 27; 55 
Am. St. Rep. 640; 44 N. E. 715; 34 L. R. A. 232. It appears from the 
facts stated in this opinion that Augustus Whiting, a resident of New¬ 
port, Rhode Island, died there in July, 1894, leaving a will by which 
he gave his entire estate in trust for his infant daughter. At the* time 
of his death, he had money on deposit in a bank in New York, and was 
possessed of certain bonds and certificates of stock that were found in 
a rented, safety deposit vault within the state of New York. The stocks 
and bonds were issued partly by corporations of New York and partly 
by foreign corporations, and there were also some $52,000 in bonds of 
the United States among the lot. The court held in this case that the 
bonds of the foreign corporations as well as the bonds and certificates 
of stock of the New York corporations, although owned by a non-resi¬ 
dent, were “property within the state” and subject to the tax. The court 
further held that the bonds of the United States were exempt from 
the tax under the peculiar provisions of the New York statute. 

The second case was that of in Re Houdayer, 150 N. Y. 37; 55 Am. 
St. Rep. 642; 44 N. E. 718; 34 L. R. A. 235. In this case it appears that 
John F. Houdayer died intestate at Trenton, New Jersey, where he 
resided for a number of years. In 1876, he opened an account with the 
Farmer’s Loan and Trust Co., of the city of New York, as trustee under 
the will of one Husson, deceased, in which he from time to time de¬ 
posited money belonging to the trust estate as well as money belonging 
to himself personally. At the death of Houdayer the state of. New York 
sought to tax the balance on hand in the account amounting to some 
$73,000, of this amount, $2000 belonged to the trust estate and the re¬ 
mainder to Houdayer himself. The court held that the funds were sub¬ 
ject to the inheritance tax of the state of New York, and in doing so 
stated, “While the relation of debtor and creditor technically existed 
practically he had his money in the bank and could come and get it when 
he wanted it. It was an investment in this state, subject to attachment 
by creditors. If not voluntarily repaid, he could compel payment through 
the courts of this state. The depositary was a resident corporation, and 
the receiving and retaining of the money were corporate acts in this 
state. Its repayment would be a corporate act in this state. Every right 
springing from the deposit was created by the laws of this state. Every 
act out of which those rights arose was done in this state. In order 
to enforce those rights, it was necessary for him to come into this state. 
Conceding that the deposit was a debt, conceding that it was intangible, 
still it was property in this state, for all practical purposes, and in every 
reasonable sense within the meaning of the transfer tax act. Re Ro- 
maine’s Estate, 127 N. Y. 80, 89, 12 L. R. A. 401.” The deposit was there¬ 
fore held subject to taxation. 

The third case was that of in Re Bronson’s Estate, 150 N. Y. 1; 55 
Am. St. Rep. 632; 44 N. E. 707; 34 L. R. A. 238. In this case, the 
decedent was domiciled in the state of Connecticut where he died in 
1893, leaving by his will his residuary estate to his two sons, residents 
of Connecticut. A part of the residuary estate consisted of shares of 
capital stock and in the bonds of corporations organized under the laws 
of New York. The bonds and certificates of stock being in the testator’s 


PROPERTY AND PERSONS SUBJECT TO TAX 


17 


possession at his domicile. The court held that the bonds were merely 
evidence of indebtedness and that the situs of the debt was at the cred¬ 
itor’s domicile; and that the state of New York had no jurisdiction over 
these bonds. But as to the shares of stock, the court took a different 
view and held that “corporate shares must be regarded as property 
within the broad meaning of that term. Certificates of stock, in the 
hands of their holder, represent the number of shares which the cor¬ 
poration acknowledges that he is entitled to. * * * As personalty, 

the legal situs does follow the person of the owner; but the property i6 
in his right to share in the net produce, and, eventually, in the net; 
residum of the corporate assets, resulting from liquidation. That right' 
as a chose in action must necessarily follow the shareholder’s person; 
but that does not exclude the idea that property as to which the right 
relates, and which is, in effect, a distinct interest in the corporate prop¬ 
erty, is not within the jurisdiction of the state for the purpose of as¬ 
sessment upon its transfer through the operation, of any law, or of the 
act of its owner. The attempt to tax a debt of the corporation to a 
non-resident of the state, as being property within the state, is one 
thing, and the imposition of a tax upon the transfer of any interest in 
or right to the corporate property itself is/ another thing. The corpora¬ 
tion is the creature of the state laws, and those who become its members, 
as shareholders, are subject to the operation of those laws, with respect 
to any limitation upon their property rights and with respect to the right 
to assess their property interests for the purposes of taxation.” 

The Court of Appeals of New York, in the case of People ex Rel. Hatch 
v. Reardon, 184 N. Y. 431; 77 N. E. 970; 112 Am. St. Rep. 6'28; 6 Ann. Cas. 
515; 8 L. R. A. (ns) 314, had occasion to consider^ in relation to their 
transfer tax law, whether there was “property within the state” within 
the meaning of the New York statutes, where it appeared that two resi¬ 
dents of Connecticut came to New York and there sold and assigned to 
each other certain shares of stock in corporations organized and exist¬ 
ing under the laws of Virginia and Wisconsin. The shares of stock were 
in New York at the time of the purchase and sale but there was no prop¬ 
erty of the corporation within the state so far as it appears from the 
record. The court said, in part, “The fiction of the common law, moMlia 
sequuntur personam , has no foundation in the Constitution, and does 
not control the legislature, which rejects or adopts* it at will as applied 
to the subject of taxation. When two citizens of Connecticut come into 
this state and make a contract here, to be enforced here, both they and 
their contract are subject to its laws; and they are not only entitled to 
the protection thereof, but are under; the same obligation to obey as if 
they were citizens. Such a contract is valid or 1 invalid as our laws de¬ 
clare.” The court further approves of the doctrine of Kidd v. Alabama, 
188 U. S. 730, 733; 47 L. ed. 669, 672; 23 Sup. Ct. Rep. 401, 402, wherein 
it was held that shares of stock may be within a state and the prop¬ 
erty of the corporation outside of it. 

It should be noted that the foregoing case was decided in 1906 and 
that it shows a tendency to accept the rule of Massachusetts and Mich¬ 
igan in the matter of determining what is “property within the state.” 

2 


18 


COLLATERAL INHERITANCE TAX LAW 


Equitably Conversion—When Proceeds of Real Estate Brought With¬ 
in State for Distribution Subject to Tax—The statute of Iowa expressly 
exempts from the collateral inheritance tax “real estate located outside 
of the state passing in fee direct from the decedent owner.” However, 
it also provides that all property brought within the state “for purpose 
of distribution” shall be taxed. It has never been determined by our 
supreme court whether proceeds derived from the sale of real estate 
lying without the state is subject to the tax when brought within this 
state for distribution. The Treasurer of State has adopted the rule that 
unless the real estate passes “in fee direct from, the decedent owner,” 
the property, as well as the proceeds, is subject to the tax. 

There is no case directly in point in Iowa, but in the case Re Weaver’s 
Estate, (1900) 110 Iowa 328; 81 N. W. 603, the proceeds derived from the 
sale of cattle sold in Missouri (the cattle being then exempt from the 
tax) were treated as exempt when brought within this state for dis¬ 
tribution. This decision was rendered prior to the time of inserting 
the clause in the statute that when property is “brought within the 
state” for the “purpose of distribution” it should become subject to the 
tax. 

Should a testator residing in this state specifically devise real prop¬ 
erty located in another state to a beneficiary, there is clearly an exemp¬ 
tion in favor of such legatee, but where the testator orders his executors 
to sell the land and distribute the proceeds, a question is raised which 
is not easily solved. In such cases the court will be obliged to consider 
what is known as “equitable conversion.” 

This term has been defined as “a change in the nature of property 
by which, for certain purposes, real estate is considered as personal, 
and personal estate as real, and transmissible and descendible as such.” 
Haward v. Peavey, 128 Ill. 430; 21 N. E. 503; 15 Am. St. Rep. 120; 
Pomeroy Eq. Jur. Sec. 1159; 9 Cyc. 824. It has also been held “an equi¬ 
table conversion arises where owing to the binding directions of a will 
it becomes proper and legal for a court to treat real estate as having 
been converted into personal property although there has been no actual 
exchange.” In Re McKay, 75 N. Y. App. Div. 78; 77 N. Y. Supp. 845. 
The basis of this doctrine is that equity will regard “things directed 
or agreed to be done as actually performed.” 9 Cyc. 825. 

This rule has been adhered to in Iowa a number of times, but not in 
cases relating to collateral inheritance. Among the Iowa cases see, Re 
Estate of Bernhard, (1907) 134 Iowa 603; 112 N. W.*86; 12 L. R. A. (ns) 
1029, where it is said “where a testator in his will directs a sale of 
real estate, the property is thereby converted from realty to personalty, 
and, whenever the sale takes place the proceeds arising therefrom are 
to be distributed as personalty.” 

As a general rule the necessity of conversion of realty into personalty 
to accomplish the express provisions of a will is equivalent to an ex¬ 
press direction to convert the property and is in effect an equitable 
conversion. This finds abundant support in the opinions of many states. 
See 9 Cyc. 833. If, however, the act of converting is left to the option 
or discretion of the beneficiaries or trustees, it has been held no con¬ 
version is effected. Also that where there is a mere naked power to 


PROPERTY AND PERSONS SUBJECT TO TAX 


19 


sell, the property retains its original status until the power of sale is 
exercised. Haward v. Peavey, 128 Ill. 430; 21 N. E. 503; 15 Am. St. 
Rep. 120. Such has been the holding when the executors were given 
power to sell land for the payment of debts. Re Fox, 52 N. Y. 530; 11 
Am. Rep. 751. 

This feature of the Iowa collateral inheritance tax is entirely too 
broad to be treated upon in a work of this character, hence nothing 
more than general principles is here given. 

ILLINOIS. 

The statute of Illinois, in 1904, was in all material respects the same 
as that of New' York on inheritance taxes, and the court followed the 
rule announced in Re Swift, infra, by the New York court, and held the 
doctrine of equitable conversion is recognized in equity only, and is not 
given effect in courts of law; and that it could not be applied so as to 
subject real property situated in foreign states or the proceeds thereof, 
to the succession tax of Illinois. Connell v. Crosby, (1904) 210 Ill. 380; 
71 N. E. 350. 

MICHIGAN. 

While the case of Re Stanton’s Estate, 142 Mich. 491; 105 N. W. 1122, 
does not discuss “equitable conversion” yet it holds where an owner has 
sold land under contract, the legal title to remain ir vendor until the 
purchase price is paid, that the right of succession to the vendor’s in¬ 
terest at her death is subject to the inheritance tax even though succes¬ 
sion to “real estate” is exempt therefrom. 

NEW YORK. 

In, the case of Re Swift’s Estate, i37 N. Y. 77; 50 N. Y. S. R. 91; 32 
N. E. 1096; 18 L. R. A. 709, the decedent, Swift, died a resident of New 
York, leaving a will l)y which he disposed of all his property among 
his relatives. After many legacies he directed a division of his resid¬ 
uary estate into four portions and bequeathed one portion to each of 
four persons therein named. The executors were given a power of sale 
for the purpose of paying legacies and of making the distribution of 
the estate. At the time of his death he owned both real and personal 
property situated in the state of New Jersey. The court held the 
personal property was subject to the tax of New York but that the real 
estate was exempt, and that the doctrine of “equitable conversion is not 
applicable to subject it to taxation.” It should be noted that in this 
case only a “power of sale” was given and not a direct and positive 
order to sell, nor was it shown to be necessary that a sale be made to 
effectually distribute the residuary estate. 

Relying upon the case of Re Swift, supra, the surrogate’s court of New 
York has gone a step further and, held that the proceeds derived from 
the sale of land in Nebraska, under a contract of sale made by decedent 
in New York shortly before her death, was to be treated as realty and 
exempt. The court in this case states that the doctrine of equitable 
conversion cannot be invoked by a state for purposes of taxation. Re 
Baker, 67 Misc. 362; 124 N. Y. Sup. 827. 


20 


COLLATERAL INHERITANCE TAX LAW 


NORTH CAROLINA. 

Where a testator directs his executors to sell certain real property 
and divide the proceeds, it has been held in North Carolina that such 
conversion is for the purpose of distribution only and does not change 
the character of the property in respect to its liability for debts or leg¬ 
acies. Baptist Female University v. Borden, (1903) 132 N. C. 476; 44 
S. E. 47. 

PENNSYLVANIA. 

It has been repeatedly held in this state that where a testator has 
made a “positive and peremptory order to his executors to sell all of the 
real estate” that it cannot be questioned but that a conversion has been 
made of the real estate into personalty efficacious from the moment of 
the testator’s death. Hence, the proceeds derived from the sale of 
real estate, regardless of its actual situs is subject to the inheritance 
tax. Miller v. Commonwealth, (1885) 111 Pa. 321. 

The same rule was followed in Williamson’s Estate, (1893) 153 Pa. 
508, wherein it is said: “the lands of the testator lying in other states 
which he directed his executors to sell, and the proceeds from which he 
gave to persons and objects in this state, are converted by the direction 
to sell. The fund being distributable here is subject to the collateral 
inheritance tax under the rule stated in Miller v. Commonwealth,” supra. 

While a peremptory order to sell converts the real estate to personalty 
yet if the order to sell postpones the date of sale twenty years it has 
been held that no conversion was effected and that the tax could not be 
collected in such a case. Re Handley, (1897) 181 Pa. 345; 40 W. N. C. 
306; 37 Atl. 587. 

“Where, therefore, the conversion is not imperative, but only per¬ 
missive and rests in the discretion of the executors or others, it does 
not become operative until the exercise of the discretion, and in the 
meantime the land retains its normal character.” Miller v. Common¬ 
wealth, supra. 

In Re Vanuxem, 212 Pa. St. 315; 61 Atl. 876; 1 L. R. A. (ns) 400, 
it was held that the value of real estate lying in other states, which it 
was necessary to sell under authority vested in the executors in order 
to pay pecuniary legacies, that such legacies were subject to the col¬ 
lateral inheritance tax at the testator’s domicile. 

The supreme court of Pennsylvania in the case of Re Shoenberger, 
221 Pa. 112; 70 Atl. 579; 19> L. R. A. (ns) 290, held that where a tes¬ 
tator, a resident of New York, died leaving a will directing his execu¬ 
tors to convert into money real property situated in the state of Pennsyl¬ 
vania that the same should be treated by the courts of Pennsylvania as 
personal property which was at the testator’s domicile and exempt from 
the tax of Pennsylvania. 

Equitable Conversion—Partnership Property as Personalty—The 
theory of equitable conversion has long been considered in connection 
with partnership property. That real estate belonging to a partnership 
is to be treated as personal property, has been recognized in Iowa for 
many years. In the early case of Hewitt v. Rankin, (1875) 41 Iowa 39, 


PROPERTY AND PERSONS SUBJECT TO TAX 


21 


the supreme court stated: “We think the weight of authorities is to 
this effect: Real estate held by a partnership is to be regarded as the prop¬ 
erty of the firm, as to creditors and all other persons dealing with it, 
where necessary to protect their rights. The partner is to be regarded 
in such' cases as holding only an interest in the stock or capital of the 
partnership, which is 'personal property. If the business of the firm be 
in operation or there be liabilities outstanding against it, the partners 
have not an interest in its lands, or other assets that may be regarded as 
property; their interest is in the stock of the firm, whatever upon final 
settlement may be due them.” 

Continuing, the court says: “The conversion of real property into per¬ 
sonalty under the rule first above stated, is a device of equity in order 
to effectuate the settlement of partnerships, and to devote all their prop¬ 
erty to the payment of the firm debts, a result highly equitable, which 
the courts will never fail to attain. The reason of the rule ceasing in 
the absence of creditors of the firm or others having like equities, the 
rule itself should no longer be applied.” This case has been repeatedly 
affirmed, Vol. 4, of Iowa Notes, page 470. 

In a more recent case, the supreme court said: “It is the general 
rule, which has been frequently approved by this court, that in equity 
real property owned by a partnership will be treated as personalty, 
subject to the rules which govern that species of property.” See the case 
of Western Securities Co. v. Atlee, (1915) 168 Iowa 650, page 665; 151 N. 
W. 56. 

That partnership property, lying within this state, whether real or 
personal, is subject to the tax cannot be questioned. But the supreme 
court of this state has never had occasion to consider the question of 
whether real property lying without the 1 state, and owned by a partner¬ 
ship, should be treated as personal property or real property for the pur¬ 
pose of collateral inheritance taxation. 

IN GENERAL. 

As to the application of the theory of equitable conversion to partner¬ 
ship property in general, see the Annotations to Robinson Bank v. Miller, 
27 L. R. A. 449; and Johnson v. Hogan, 37 L. R. A. (ns) 889. 

NEW YORK. • 

“Although the question has not been litigated, the New York state 
comptroller has given an opinion that, under this doctrine, that real 
estate owned by a partnership though situated outside the state is to be 
included: in the valuation of the assets of the firm in which a decedent 
had an interest.” Gleason and Otis on “Inheritance Taxation,” page 
261, Matter of Dusenberry, 2 N. Y. State Dept. Rep. 501. It is therefore 
clear that New York regards partnership real property, even though 
lying without the state, as personalty and subject to the tax. 

ENGLISH RULE. 

In the case of Commissioner of Stamp Duties v. Salting, (1907) 76 L. 
J. P. C. N. S. 87; 97 L. T. N. S. 225; 23 Times L. R. 723; 3 British Ruling 
Cases 786, it was held that the interest of W. S. Salting, deceased, in a 
sheep farming station and property in New South Wales owned and oper- 


22 


COLLATERAL INHERITANCE TAX LAW 


ated by a partnership was subject to the stamp duty in New South Wales 
where the property was located, and not according to the law of England 
where the decedent resided during his lifetime. 

But under an earlier case, (1870) it was held that a legacy duty was 
payable upon the share of a deceased partner domiciled in England in 
the proceeds of real estate situated in Bombay belonging to the part¬ 
nership, the business of which was carried on at the latter place. Forbes 
v, Steven, L. R. 10 Eq. 178; 39 L. J. Ch. N. S. 485; 22 L. T. N. S. 703; 
18 Week. Rep. 686. 

“And in Laidlay v. Lord Advocate (1890) 15 App. Cas. 468, it was 
held that the interest of a deceased partner in a concern organized to 
do business in India, and whose business was entirely carried on there 
under the, management of agents who were partners, was not property 
situated in England, and was not liable for the probate duty there, 
although all but two of the sixteen partners resided in England and 
the business was carried on under their advice, and a firm in the latter 
country was named as a financial agent of the concern.” See Note to 
Commissioner of Stamp Duties v. Salting, 3 British Ruling Cases, 793. 

Corporate Stock as “Property Within the State”—The state has a 
right to tax succession to shares of corporate stock of a corporation lo¬ 
cated within the state and existing by virtue of its laws, even though 
the owner of the stock be a non-resident. Re Culver, (1909) 145 Iowa 1; 
123 N. W. 743; 25 L. R. A. (ns) 384 where succession to bank stock was 
held subject to/ tax. 

MARYLAND. 

State v. Dalrymple, 70 Md. 294; 17 Atl. 82; 3 L. R. A. 372. 

MASSACHUSETTS. 

Greves v. Shaw, 173 Mass. 205; 53 N. Ei. 372; Moody v. Shaw, 173 Mass. 
375; 53 N. E. 891; Kingsbury v. Chapin, 196 Mass. 533; 82 N. E. 700; 
13 Ann. Cas. 738. 

MICHIGAN. 

In Re Stanton’s Estate, 142 Mich. 491; 105 N. W. 1122. 

MINNESOTA. 

State v. Probate Court, 128 Minn. 371; 150 N. W. 1094, a case exceed¬ 
ingly well stated and containing many citations where stock in both 
State and National banks belonging to a non-resident were taxed as 
were shares of stock in a lumber company, notes, and book accounts. 

NEW YORK. 

Matter of Whiting, 150 N. Y. 27; 44 N. E. 715; 34 L. R. A. 232; 55 
Am. St. Rep. 640, where tax was assessed on transfer of shares of do¬ 
mestic corporation as well as, shares of foreign corporation when shares 
of stock were on deposit within state at time of owner’s death at his 
residence in Rhode Island. 

Debts Due from Residents of Iowa to Non-Residents—In the case 
of Gilbertson v. Oliver, (1906) 129 Iowa 568; 105 N. W. 1002, under a 
former statute the Iowa supreme court held that debts due from a resi- 


PROPERTY AND PERSONS SUBJECT TO TAX 


23 


dent of this state to a resident of New Hampshire were not subject to 
the inheritance tax of this state. The court adopted the theory that 
the situs of the debt was at the domicile of the creditor and not that 
of the debtor. Likewise, the rule was applied to notes and to certificates 
of deposit. This view is not in harmony with that expressed in opin¬ 
ions of many of the states of the union. But see the recent opinion 
in the case of Hoyt v. Keegan, Administrator, (decided May 13th, 1918) 
wherein our present statute has been so construed as to bring it within 
the modern trend of cases, and where certificates of deposit owned by a 
non-resident were taxed. 

MARYLAND. 

State of Maryland v. Dalrymple, 70 Md. 294; 17 Atl. 82; 3 L. R. A. 
372 is contra to Gilbertson v. Oliver, supra. 

MINNESOTA. 

In the case of State v. Probate Court of St. Louis County, 128 Minn. 
371; 150 N. W. 1094, the tax was levied upon a book account of over 
$80,000.00 and also upon a note for over $13,000.00, due from residents 
of Minnesota to a> resident of Pennsylvania. 

NEW YORK. 

In the case of Re Daly’s Estate, the decedent was a resident of Mon¬ 
tana and at the time of his death there was due him from a creditor 
in New York some $263,000.00 on open account. His secretary had also 
deposited to his credit in a special account over two million dollars, 
without the knowledge of Daly. A tax was sustained on both the open 
account and the special deposit. 100 App. Div. 373; 91 Supp. 858; 182 N. 
Y. 524; 74 N. E. 1116. 

Bank Deposits as “Property Within the State”—The right to levy a 
tax on the succession to an ordinary bank deposit in this state belonging 
to a resident of Kansas was recognized in Re Estate of Culver, (1909) 
145 Iowa 1; 123 N. W. 743; 25 L. R. A. (ns) 384. There is dictum in 
this case that should the deposit be evidenced by a certificate of deposit 
and be in the possession of a non-resident at his domicile that the de¬ 
posit would not be subject to the tax. 

On a second appeal of this case (153 Iowa 461, 133 NW. 722) and 
on the third appeal (159 Iowa 679; 140 NW. 878) there is dictum that 
an ordinary bank deposit made by a non-resident is not taxable. But all 
this dictum has been overruled in the case of Hoyt v. Keegan, Adminis¬ 
trator, (decided May 13th, 1918) wherein a savings account evidenced by 
a pass book and a certificate of deposit were both held to be taxable, the 
depositor being a resident of Illinois and the passbook and certificate 
being issued by a bank of this state. 

In the case of Gilbertson v. Oliver, (1906) 129 Iowa 568; 105 N. W. 
1002; 4 L. R). A. (ns) 953, it was held that a deposit in a bank of this 
state evidenced by a certificate of deposit and held by the non-resident 
owner at her residence in New Hampshire at the time of her death was 
not subject to the inheritance tax of Iowa, there being no property 
within this state. 


24 


COLLATERAL INHERITANCE TAX LAW 


For the law relating to joint deposits and joint ownership of prop¬ 
erty, see page 25 hereof. 

IN GENERAL. 

There is also abundant authority for the proposition that there is no 
provision in the federal constitution prohibiting the state in which the 
deposits are made from levying a tax! on the right of succession to the 
deposits, even though the state of which the depositor is a resident 
may also levy a tax. One of the leading authorities on this proposition 
is Blackstone v. Miller, 188 U. S. 203; 23 Sup. Ct. 277; 47 L. Ed. 439. 
In this case the decedent was a resident of Chicago and the deposits were 
in the charge of a trust company in the city of New York. The de¬ 
posits amounted to between four and five million dollars, being the pro¬ 
ceeds derived from the sale of a railroad. The state of New York was 
held to be entitled to levy a tax on the right of succession to these funds 
even though the state of Illinois would also levy a tax. 

That ordinary bank deposits are subject to taxation at their actual 
situs is so well established that the question is now seldom raised. That 
the state in which an owner is domiciled may levy the tax on the right 
to succession to deposits in banks in foreign states finds support in many 
cases. It has been so held even though the deposits have been directly 
administered upon and distributed in such foreign states. The fol¬ 
lowing are authorities on this proposition. Re Hodges_ Calif.; 

150 Pac. 344; L. R. A. 1916A, 837; People v. Union Trust Company, 255 
Ill. 168; L. R. A. 1915D, 450; 99 N. E. 377; Ann. Cas. 1913D, 514; Mann 
v. Carter, 74 N. H. 345; 15 L. R. A. (ns) 150; 68 Atl. 131; Frothingham 
v. Shaw, 175 Mass. 59; 78 Am. St. Rep. 475; 55 N. E. 623. 

See the note to the case of Re Helena, 46 L. R. A. (ns) 1167, which 
fully covers this matter. 

MICHIGAN. 

See in Re Stanton’s Estate, 142 Mich. 491; 105 N. W. 1122, where tax 
was levied even though depositor was resident of New York. 

NEW HAMPSHIRE. 

There is a well-reasoned line of authorities in the state of New' Hamp¬ 
shire holding that in many, respects the rights of a depositor in a bank 
are analogous to those of a stockholder of a business corporation; and 
that the depositing of money in another state, by a resident of New 
Hampshire, does not remove the deposits beyond the taxing power of 
the state of New Hampshire, even though the funds be physically within 
another state, since the deposits are within the constructive possession 
of the decedent at the place of his domicile. Furthermore, that while 
the state of Massachusetts in the exercise of its taxing power might levy 
a tax on the right of succession to the deposits, yet such fact would not 
prevent the state of New Hampshire from levying its succession tax on 
the same identical property. Mann v. Carter, 74 N. H. 345; 68 Atl. 130; 
15 L. R. A. (ns) 150. 

NEW YORK. 

In Re Houdayer, 150 N. Y. 37; 55 Am. St. Rep. 642; 44 N. E. 718; 
34 L. R. A. 235, deposits in New York were taxed although decedent was 
a resident of New Jersey. 


PROPERTY AND PERSONS SUBJECT TO TAX 


25 


Deposits are taxed in New York even though depositor holds a cer¬ 
tificate of deposit at his non-resident domicile. Gleason and Otis on 
“Inheritance Taxation,” page 257. Citing Matter of Hewitt, 90 Supp. 
1100; affirmed in 181 N. Y. 547. 

See also in Re Daly’s Estate, 100 App. Div. 373; 91 Supp. 858; 182 N. 
Y. 524; 74 N. E:. 1116. This case involves an unusual state of facts. 
During the life-time of Daly, he loaned considerable money to Wm. G. 
Rockefeller, a resident of New York. Daly was a resident of Montana. 
He came to New York on business and was taken seriously ill. Rocke¬ 
feller gave to Daly’s secretary a check for some two million dollars in 
payment of a loan. The secretary deposited this money in a special 
account for Daly in one of the banks of New York, all of which was 
without any knowledge on the part of Daly. Shortly thereafter, Daly 
died, and the state of New York was held to be entitled^ to levy its tax 
upon the deposit. 

Government Bonds—Liberty Loan Blonds—Bonds of the United 
States and bonds of any State or sub-division are subject to the in¬ 
heritance tax of the state or of the United States regardless of the fact 
that such bonds may be exempt from ordinary taxation. The inheritance 
tax is not a tax on the property but on the right of succession to the 
property. There is abundant authority for the taxing of succession to 
government bonds as will be discovered by a review of the following 
cases, 

LOUISIANA. 

Succession of Levy, (1905) 115 La. 378; 39 So. 37, affirmed by the 
Supreme Court of the United States, (1906) 203 U. S. 543; 27 Sup. Ct. 
R»ep. 174; 51 L. Ed. 310. 

NEW YORK. 

Matter of Sherman, 153 N. Y. 1; 46 N. E. 1032, holding bonds of the 
United States to be taxable but by reason of a peculiar statute then in 
force in New York they were not to be included in assets of the estate for 
inheritance tax purposes. 

See also the case of People ex rel. U. S. A. P. P. Co. v. Knight, (1903) 
174 N. Y. 475; 67 N. E. 65. 

UNITED STATES. 

Plummer v. Coler, (1900) 178 U. S. 115; 20 Sup. Ct. Rep. 829, where 
it was held proper to tax the succession to United States bonds. Wal¬ 
lace v. Myers, (1889) 38 Fed. 184. Murdock v. Ward, (1900) 178 U. S. 
139; 20 Sup. Ct. Rep. 775; 44 L. Ed. 1009. 

Joint Ownership of Property—Rule as to Taxation of—Under this 
head joint tenancies, tenancies in common, and joint ownership of 
property is considered. The courts have no uniform rule in determining 
whether a tax shall be levied in such cases. So far as Iowa is con¬ 
cerned, our court has never passed upon this matter from a standpoint 
of collateral inheritance taxation, however, there are two cases which 
consider the matter and may serve as an aid in reaching what may 
be found the correct view. 

In the matter of Brown’s Estate, (1901) 113 Iowa 351; 85i N. W. 617, 
John Brown, the decedent, prior to his death, had certificates of deposit 


26 


COLLATERAL INHERITANCE TAX LAW 


amounting to some $1600.00 made out to himself and his wife, Mary 
Brown. At the time these certificates were made out, the intent was 
to so deposit the funds that in case of the death, of one of the parties 
that the other might obtain the money upon surrender of the certificates 
of deposit. The 1 certificates in this case were placed in the wife’s keep¬ 
ing, but apparently not for the purpose of transferring absolute and 
unqualified title to her. Under the evidence, the court held that the 
deceased and his wife were joint owners of these certificates at the time of 
his death, and that the wife was entitled as survivor to only one-half of 
the fund and that the other half should be distributed as part of the 
estate of the husband. 

In the case of Knutson v. Vidders, (1897) 126 Iowa 511; 102 N. W. 
433, it appears that Hellick Quinsland and. his wife, Serene, executed a 
will jointly. Part of the will stated, “We, Hellick Quinsland and Serene 
Quinsland, his wife, hereby make known our last will,” etc., and the 
instrument was signed by both the husband and the wife. The will in 
part provided, “I hereby transfer to my wife, Serene Quinsland, the right 
and authority over our joint property whatever it may be, real or per¬ 
sonal, in case she should outlive me, to live on undivided property until 
her death, the property that is left to be divided equally between our 
lawful heirs on both sides.” It was held in this case by the lower court 
that the widow, Serene Quinsland, was the owner in fee of an undivided 
one half interest in the property of her deceased husband, and that his 
heirs were the owners of the other undivided one half. This was the 
holding regardless of the fact that Hellick Quinsland was the owner in 
fee of the real property transferred by' this will. 

It may therefore be deducted that the theory of survivorship does not 
obtain in this state so as to clothe the survivor of property owned in 
common with full and unqualified ownership at the death of the other 
tenant, or owners in common. It appears, however, that where there are 
two joint owners, that the survivor is entitled to an undivided one-half 
of the property. In the event of the death 1 of one joint depositor the 
survivor is entitled to receive the entire fund. This is by virtue of 
an affirmative statute. Sec. 1889-b, Supplement, 1913. It is a query 
whether the survivor takes the deposit free from the inheritance tax 
in such cases. 

The reasoning given by the supreme court of Maine in the case cited 
under this heading appeals to one as founded in logic and justice. 

MAINE. 

In a recent case reported from Maine it appears that residents of that 
state made a joint deposit in a bank in Rhode Island. It was held by 
the court that the law of the state where the deposit was made deter¬ 
mined whether the doctrine of survivorship applied. Since such a rule 
would not be recognized by Rhode Island, under the facts of this case, 
the deposit was taxed in Maine on passing to the survivor. The court 
further held that such a deposit was not a gift inter vivos as it was not 
absolute and unqualified since the donor retained the right to use the 
funds at her pleasure during her life time; and that it was invalid as a 
gift if it was intended that the survivor should take full title and owner¬ 
ship in the deposit in case of the death of one of the joint depositors 


FROPERTY AND PERSONS SUBJECT TO TAX 


27 


since this would be attempting testamentary disposition of property 
which can be accomplished only by means of a will. Barstow et al. v. 
Tetlow et al. f 115 Me. 96. The reasoning in this case is convincing. 

MASSACHUSETTS. 

The theory of survivorship is recognized in Massachusetts and no tax 
is to be applied on the succession by one of the parties to real property 
held by two persons jointly at the death of one of the joint owners. 
This holding was reached after considering the Massachusetts statute 
which imposes a tax on real property which passes by the “laws regu¬ 
lating intestate succession”. Palmer v. Treasurer and Receiver General, 
222 Mass. 263; 110 NE. 283; L. R. A. 1916C, 677. The same rule was 
applied to a joint tenancy in a bank account and it was thus held ex¬ 
empt from the tax. Attorney General ex rel. Treasurer and Receiver 
General v. Clark, 222 Mass. 291; 110 NE, 299; L. R. A. 1916C, 679. In 
both of these cases it was held that succession to the property was not 
obtained by virtue of laws regulating descent of property, nor by virtue 
of relationship, but solely on the ground of being the surviving joint 
tenant. 


NEVADA. 

The rule in this state is that the interest of a wife in community 
property is acquired by marriage and not by the laws relating to succes¬ 
sion pr inheritance, but that the interest is vested in the wife at all times 
during the marriage and therefore was not subject to the inheritance 
tax at the death of the husband. Re Estate of Williams, — Nev. —; 
161 Pac. 741; L. R. A. 1917C, 602. 

NEW YORK. 

This state had a great deal of trouble with, this question and finally 
enacted a statute thoroughly covering the subject and preventing evasion 
of the tax through joint ownership. The statute is as follows: “When¬ 
ever property is held in the joint names of two or more persons, or as 
tenants by the entirety, or is deposited in banks or other institutions 
or depositaries in the joint names of two or more persons and payable 
to either or the survivor, upon the death of one of such persons the 
right of the surviving tenant by the entirety, joint tenant or joint 
tenants, person or persons, to the immediate ownership or possession 
and enjoyment of such property shall be deemed a transfer taxable under 
the provisions of this chapter in the same manner as though the whole 
property to which such transfer relates belonged absolutely to the de¬ 
ceased tenant by the entirety, joint tenant or joint depositor and had 
been bequeathed to the surviving tenant by the entirety, joint tenant 
or joint tenants, person or persons, by such deceased tenant by the 
entirety, joint tenant or joint depositor by will.” Subdivision 7, sec. 220 
of Tax Law of State of New York, 1917. 

In interpreting this section in the case of Re McKelway, (1917) 221 
N. Y. 15; 116 NE. 348; L. R. A. 1917E, 1143, where it appears that the 
decedent and his wife jointly owned certain securities consisting of 


28 


COLLATERAL INHERITANCE TAX LAW 


corporate bonds, which they delivered to the Brooklyn Trust Company 
to hold in trust, and to pay the income in equal shares, to the owners, 
and should the agreement be in force at the death of either, to deliver 
and pay over the securities and any interest thereon on hand to the sur¬ 
vivor, the court held that the wife was entitled to one-half of this prop¬ 
erty in her own right and that on succession to the remaining property 
she would be obliged to pay the transfer tax of that state. 

It ought to be further stated that this kind of ownership is “an 
object of disfavor” in New York. Overheiser v. Lackey, 207 N. Y. 229, 
233; 100 NE. 739; Ann. Cas. 1914C, 229. 

Ancilliary Administration in Foreign State—Does Not Effect Right 
to Levy Tax at the Testator’s Domicile—There is authority for the 
proposition that a state may impose its inheritance tax upon personal 
property of one who dies within its boundaries, although the property 
is located in another state, where it is distributed under ancillary ad¬ 
ministration according to the law of the state of domicile, and never 
comes within the jurisdiction of the latter state. 

CALIFORNIA. 

In the case of Re Hodges, — Calif. —; 150 Pac. 344; L. R. A. 1916A, 
837, the rule was recognized where a resident of California died leaving 
certain stocks and bonds, deposits in bank, and certain other chattels, 
at the time of his death, all of which were located within the state of 
Massachusetts, and which were directly administered upon and distributed 
from the ancillary administration in that state. 

ILLINOIS. 

Thus, in the case of People v. Union Trust Company, 255 Ill. 168; L. 
R. A. 1915D, 450; 99 NE. 377; Ann. Cas. 1913D, 514, it was held that a 
decedent who died having as his domicile, Chicago, Illinois, but who 
left certain stocks and bonds in a deposit box in Los Angeles, California, 
which were administered upon and distributed through ancillary admin¬ 
istration in California, yet it was held by the supreme court of Illinois 
that the inheritance tax of that state should be levied on the entire 
property of the decedent including the personal property which had been 
administered upon and distributed by the ancillary administrator in 
California. 

NEW YORK. 

Also in the case of Re Dingman, 66 App. Div. 228; 72 N. Y. Sup. 694, 
where the decedent was domiciled at the time of his death in the state 
of New York, and left personal property in the state of Iowa, it was held 
that the transfer tax of New York could be imposed on this personal 
property in Iowa though it was never brought into the state of New York 
but was distributed directly by the courts in Iowa. 

Meaning of “In Contemplation of Death”—There are no Iowa cases 
dealing squarely with this subject to be found under the heading of the 
collateral inheritance tax. Whether a gift is made in contemplation of 
death is a question of fact. In Re Estate of Benton, 234 Ill. 366; 84 


PROPERTY AND PERSONS SUBJECT TO TAX 


29 


NE. 1026; IS L. R. A. (ns) 458. Thus, under the foregoing decision a 
gift of personal property by an old man suffering from an incurable 
disease to avoid its falling into the hands of one who otherwise might 
obtain it, in case of the donor’s death, is a gift “in. contemplation of 
death” within the meaning of the statute taxing such gifts. 

Whether a gift has been made in contemplation of death is not to be 
determined for the purposes of inheritance tax on the ground distin¬ 
guishing gifts causa mortis from gifts inter vivos, for the courts have 
apparently adhered to the doctrine that a gift made in extremis is to be 
characterized as a gift causa mortis and thus subject to the tax; and 
also to hold that a gift, even if inter vivos, is subject to the tax if made 
with intent and for the purpose of evading the provisions of the in¬ 
heritance tax law. 

See case note to in Re Benton, 18 L. R. A. (ns) 458, for a digest of 
cases upon this subject. 

There is dictum in the case of Lewis v. Brown, - Iowa -; 166 

NW. 99, that a transfer of property made for a valuable consideration in 
the form of a reasonable annuity to the grantor for life is not a “trans¬ 
fer in contemplation of death” within the meaning of the statute. How¬ 
ever, the point has not been directly passed on by our court. 

CALIFORNIA. 

In the case of Spreckles v. State, 30 Cal. App. 363; 158 Pac. 549, it 
was held under the evidence that the formation of a corporation by the 
widow of Spreckles, the “Sugar King”, after she had passed her seventy- 
ninth birthday and while suffering from chronic heart trouble and 
thereafter making gifts of shares of stock to her children were not made 
“in contemplation of death”, even though she died shortly thereafter. 
The court concedes this case was a “close one” and it intimates it would 
have been possible for the lower court to have found otherwise. An 
author in speaking of this case states that “under the court’s theory 
nothing short of proving that the deceased made the transfer on her 
death bed would make the gift of all her property one in contemplation 
of death.” 


ILLINOIS. 

In the case of People v. Burkhalter, 247 Illinois 600, 604; 139 Am. St. 
Rep. 351; 93 NE. 379, the supreme court of Illinois held that in order to 
subject a gift to the inheritance tax it was necessary to show that the 
impelling motive for making the gift was the fact that the donor made 
it “in contemplation of death.” 

In the case of Rosenthal v. People, 211 Ill. 308; 71 NE. 1121, the de¬ 
cedent, Oscar Rosenthal made a gift of some $150,000.00 in personal 
property to his wife on July 28, 1902, and on July 31, 1902 made a will 
disposing of all his property. He died September 1, 1902, of the dis¬ 
ease he was suffering from at the time of making the gift and executing 
the will. The court held that the making of the gift and will, under the 
circumstances was “strong evidence that death w r as expected.” The 
gift was held subject to the inheritance tax. 




30 


COLLATERAL INHERITANCE TAX LAW 


NEW YORK. 

In Re Metts, 172 App. Div. 530; 158 Supp. 1100;\ 219 N. Y. 100, a 
gift of two million dollars by a donor 84 years of age, who at the time 
of the gift was in failing health, unable to write, and barely able to sign 
his name, Was held to be exempt from the tax even though the donor 
died within ten days thereafter. 

Mr. Gleason, attorney for the state comptroller for New York City, 
in his work on “Inheritance Taxation” page 82, speaking of the fore¬ 
going opinion says, “This rule has proved so unsatisfactory that Sur¬ 
rogate Cohalan * * * has promulgated another doctrine which will 

go far to solving a problem that has provoked drastic legislation of 
doubtful constitutionality. In Matter of Dunne, N. Y. Law Journal, 
May 25, 1914, he stated the doctrine as follows: 

“When a person reaches the age of 80 years and makes a gift of a 
substantial part of his property, the presumption is that the gift is 
made because the donor realizes that in the ordinary course of na¬ 
ture he cannot survive much longer and wishes to anticipate the effect 
of a will or intestate laws by giving his property to those persons who 
would be legatees under a will or beneficiaries under the intestate laws 

* * * ” and therefore should be taxed. 

In the case of Re Baker, 83 App. Div. 530; 82 N. Y. Sup. 390, affirmed 
in 178 N. Y. 575; 70 NE. 1094, it is said: “This court has held that the 
words ‘in contemplation of death’, do not refer to that general expectation 
which every mortal entertains, but rather the apprehension which arises 
from some existing condition of body or some impending peril.” 

WISCONSIN. 

The supreme court of Wisconsin has given considerable thought to the 
matter of gifts made “in contemplation of death.” In the case of Re 
Dessert, 154 Wis. 320; 142 NW. 647; 46 L. R. A. (ns) 970, the supreme 
court approved of the definition previously given in the case of State v. 
Pabst, 139 Wis. 561; 121 NW. 351, where it was said that the words “in 
contemplation of death” as used in the statute of that state were “not 
used as referring to that expectation of death generally entertained by 
every person. * * * The words are evidently intended to refer to an 

expectation of death which arises from such a bodily or mental condition 
as prompts persons to dispose of their property and bestow it on those 
whom they regard as entitled to their bounty. In further explanation of 
the phrase, it is said: A gift is made in contemplation of that event when 

• it is made in expectation of that event and having it in view, and a gift 
made when the donor is looking forward to his death as impending and in 
view of that event, is within the language of the statute.” Thus where a 
man makes a substantial gift of property to his children if he is in sound 
mind and body, does not make it a gift made “in contemplation of 
death” even though he may be eighty-six years of age at the time of the 
gift. 

The supreme court of Wisconsin does not consider old age in itself suf¬ 
ficient to vitiate a gift and bring it within the provision of the inheritance 
tax statutes. 


PROPERTY AND PERSONS SUBJECT TO TAX 


31 


Taxation of Transfer of Shares of Stock in Corporations Which are 
Incorporated and Doing Business in Several Spates—Our supreme court 
has never had occasion to consider this matter but the Treasurer of 
State has adopted the rule to tax such shares of stock at their full 
value regardless of the fact that the legatee or heir may be obliged to 
pay a tax on the same shares of stock in another state where the cor¬ 
poration is incorporated. 

The rule of Massachusetts and New York is contra to that followed in 
Iowa. The annotation from Idaho presents a question seemingly not 
considered elsewhere. 

IDAHO. 

The case ot State v. Dunlap, (1916) 28 Idaho 784; 156 Pac. 1141, pre¬ 
sents an interesting feature of the inheritance taxation. The salient 
facts were that the Oregon Short Line Railroad was a corporation 
organized and existing by virtue of the laws of Utah. It had about 509 
miles of railroad in Idaho together with considerable real property, 
totaling in value many million of dollars. The entire capital stock of 
this railroad was owned, absolutely, by the Union Pacific Railroad Com¬ 
pany, a foreign corporation having no property in Idaho, except such in¬ 
terest as it possessed by virtue of ownership of the total capital stock of 
the Oregon Short Line. One of the principal stock holders in the Union 
Pacific was the late E. H. Harriman, a resident of New York, who by his 
will disposed of his interest in the Union Pacific to his wife. Harriman’s 
estate held both common and preferred stock of the Union Pacific. The 
state of Idaho sought to have the Oregon Short Line appraised and an in¬ 
heritance tax levied on the interest passing to Mrs. Harriman. 

It was held that E. H. Harriman had no property within the state of 
Idaho at his death. His interest was in the Union Pacific Railroad and 
not in the Oregon Short Line. Among the reasons given for such a hold¬ 
ing the court stated that it was not necessary for those interested in the 
Harriman Estate to ask permission or invoke the aid of the laws of Idaho 
to effectually transfer the stock passing to Mrs. Harriman. This certainly 
was true for Harriman was a “stranger” to the Short Line. All it was 
obliged to consider was its own stockholders, namely, the Union Pacific. 
That the Union Pacific was not obliged to ask permission from the state 
of Idaho to transfer its stock to Mrs. Harriman is apparent. However 
there is a vigorous dissenting opinion in this case by Chief Justice Sulli¬ 
van who adheres to the view that the transfer of the stock should be taxed. 

MASSACHUSETTS. 

The case of Kingsbury et al v. Chapin, (1907) 196 Mass. 533; 82 NE. 
462, presents a well reasoned opinion on this question. In this case the 
decedent was a resident of New' Hampshire, who died possessed of shares 
of stock in several railroads doing business in a number of states and in¬ 
corporated in each state. The Massachusetts supreme court, in part, 
stated: “In a case like the present, where corporate power is exercised 
under two franchises of the same kind, granted by two adjacent States, 
and where the ownership is represented by a single issue of stock, recog- 


32 


COLLATERAL INHERITANCE TAX LAW 


nized alike by both States, we think that, for jurisdictional purposes and 
determining values in imposing taxes, the stock in each State should be 
held to represent only the property within the State.” 

NEW YORK. 

This state follows the rule of Massachusetts, as announced in the case 
above cited. The same rule is applied in case the company is a joint 
stock association organized in several states. Matter of Cooley, 186 N. Y. 
220; 78 NE. 939; 10 L. R. A. (ns) 1010, see also the case of Matter of 
Willmer, 75 Misc. 62; 134 Sup. 686, affirmed in 153 App. Div. 804; 138 
Sup. 649. 

Proceeds of Insurance Policy—When Subject to Tax—*-The treasurer 
of state has adopted the rule that the proceeds of a life insurance policy 
payable to the decedent’s estate is to be taxed, but if otherwise it is 
exempt. 

IN GENERAL. 

The courts are not all agreed upon the question of whether the pro¬ 
ceeds of an insurance policy made in favor of a specific beneficiary is 
subject to the succession tax. In the case of Tyler v. Treasurer and 

Receiver General, - Mass. -, 115 NE. 300; L. R. A. 1917D, 633, it 

was held that the beneficiary under a life insurance policy does not take 
the proceeds “by deed, grant or gift, * * * made or intended to take 

effect in possession or enjoyment after the death of the grantor” but 
that such beneficiary has an immediate interest in the policy, and the 
money to become due under it, at the time the policy is issued; that this 
interest is therefore not postponed until the death of the insured. 

The foregoing finds support also in the case of Bullen’s Estate, 143 Wis. 
612; 139 Am. St. Rep. 1114; 128 NW. 109; Re Parsons, 117 App. Div. 321; 
102 N. Y. Supp. 168; Re Knoedler, 140 N. Y. 377; 35 NE'. 601. 

But the proceeds of policies of insurance wherein the insured, his ex¬ 
ecutor, administrator, or his legal representatives are named as the 
beneficiaries, when paid into, and become a part of the assets of the de¬ 
cedent’s estate, are subject to the inheritance tax. Re Knoedler, supra. 

An early English case, wherein the proceeds of a policy of insurance 
were willed by the decedent to his sister, held that the tax should be ap¬ 
plied on the right to the sister’s succession to the benefits of the policy. 
Atty. Gen. v. Abdy (1862) 1 Hurlst. & C. (Eng.) 256; 32 L. J. Exch. N. S. 
9; 8 Jur. N. S. 798; 6 L. T. N. S. 756. 

The Time When an Estate Comes Into Existence and Tax Accrues— 
The statute provides that the tax “shall accrue at the death of the de¬ 
cedent owner.” It has been well stated that the devolution of the property 
and the tax lien attach at the same time. 

In the case of Re Estate of Wells (1909), 142 Iowa 255; 120 NW. 713, 
our supreme court announced the rule that when a will has been admitted 
to probate, the will speaks as of the time of the testator’s death and de¬ 
termines those then entitled to the estate. In other words, the persons 
who are entitled to share in the estate of decedent are those who are en¬ 
titled to the property at the instant the testator dies regardless of the 



FROPERTY AND PERSONS SUBJECT TO TAX 


33 


time when the will is admitted to probate or administration is petitioned 
for. The tax is to be determined according to the value of the property 
at the time of the death. This rule finds support in the cases from Mas¬ 
sachusetts and New York. 

In the case of Gilbertson v. Ballard (1904) 125 Iowa 420; 101 N'W. 
108, the supreme court held that the tax attached “ from the death of the 
decedent”; in other words, the tax attaches eo instante upon the de¬ 
cedent’s death. Hence if the death, occurred before passage of the col¬ 
lateral inheritance tax statutes, the estate was not subject to the tax. 
The statute is not retroactive in its operation. 

Life Estates—Waiver of Life Estate—Inheritance by Adopted Child 
—If a grantor makes a deed conveying a present interest in the land 
to collateral heirs, without in any way making the grantee’s estate de¬ 
pendent upon the grantor’s death, the grantees may take the property 
free from the collateral inheritance tax. The tax applies when the in¬ 
terest in the real estate, or enjoyment thereof, is postponed until after 
death of the grantor. In Re Bell’s Estate (1911), 150 Iowa 725; 130 NW. 
798. This decision was rendered under sec. 1467, of the Code. 

While the case of Lamb. v. Morrow (1908), 140 Iowa 89; 117 NW. 1118, 
was decided under section 1467 of the Code as amended by the 30th and 
31st G. A., yet it does not involve the amendments but relates to mat¬ 
ters now appearing in the foregoing section, namely; inheritance through 
an adopted child, and whether land granted in consideration of the 
care of the grantors during their life time by the grantee was subject 
to the tax. The court held that the failure to have the adoption papers 
acknowledged and recorded as required by statute was fatal to the claim 
of adoption. It further held that where the grantors and grantees enter 
into a bona fide contract whereby the grantors convey by deed to the 
grantees certain land, reserving to themselves a life estate, in considera¬ 
tion that the grantees will care for the grantors during the remainder 
of their lives, and the grantees thereupon take possession in order to 
fulfill the terms of the contract, and where the grantors thereafter ivaive 
their life estate, that the grantees may take free from the tax even 
though a will be admitted to probate wherein one of the grantors re¬ 
affirms the contract previously made. Other questions were determined 
which are not essential to this subject. 

In the recent case of Brown v. Gulliford (1917), Iowa ...; 165 NW. 182, 
three sisters, who were the decedents conveyed to the defendant, Gulli¬ 
ford, by warranty deed a certain farm with full covenants of warranty, 
‘‘reserving, however, unto the grantors herein, or to the survivor or 
survivors of them, a life estate in said land, and the use and occupancy, 
rents and profits of the same for the term of the natural life of said 
grantors, or the survivor or survivors of them.” Later on, the defend¬ 
ant leased the farm from the decedents for the term of ten years, which 
was apparently for a term longer than any of the decedents would be 
probable to live. The decedents were to receive the sum of $400.00 per 
year as the rental value under the lease. The defendant went into pos¬ 
session of the premises under this lease, erected a house, constructed 
3 


34 


COLLATERAL INHERITANCE TAX LAW 


other buildings and made general improvements and paid the taxes. 
At the death of the last of the three sisters, the state asserted that the 
defendant should pay the collateral inheritance tax since the deed was 
not “intended to take effect in possession, or in enjoyment after the 
death of the grantor.” 

The court held the “possession” and “enjoyment” was given to the 
defendant by virtue of the lease which in substance waived the reser¬ 
vation of the life estate on the payment of the $400.00 per year. It 
should be noted that there was no evidence or intimation in this case 
that any attempt was made to avoid the collateral inheritance laws 
of this state, the transaction was 'bona fide throughout. Further the 
court held that the state could challenge a “covinous conveyance, or one 
which pretending to be on full consideration,” and show' it to be voluntary. 

It further stated that under our statute, the tax may not be avoided 
merely because the deed was made upon full consideration; and that 
consideration is material only when a question arises as to whether 
the conveyance is for the purpose of avoiding the tax. The payment 
of a consideration will not in itself exempt the grantees from the tax, 
but the amount and the manner of payment will have bearing upon 
whether the transfer has been made in good faith. 

NEW YORK. 

In Re Gould, 156 N. Y. 423; 51 NE. 287, holding that payment of con¬ 
sideration does not necessarily avoid payment of tax. 

See page 35 hereof for cases sustaining this rule. 

Reservation of Income for life—Profits, cLc.—Effect of—The owner 
of an estate cannot defeat the tax by any device which secures to him 
for life the income, profits, or enjoyments thereof. To* prevent taxation 
the conveyance must be such as passes possession, the title, and the 
enjoyment of the property in the grantor’s life time. Lamb v. Morrow, 
(1908) 140 Iowa 95; 18 L. R. A. (ns) 230; 117 NW 1118. Reaffirmed as 
to life estate in Brown v. Gulliford, ... Iowa ...; 165 NW. 182. Both 
cases citing and approving of Re Brandreth (N. Y.) reviewed in the fol¬ 
lowing annotation. 

NEW YORK. 

This subject fully considered in Re Brandreth, 169 N. Y. 437; 62 NE. 
563; 58 L. Ri. A. 148, where it was held that the transfer by the decedent 
of shares of stock to his daughters and the assigning by them of all 
dividends, etc., to their father, the decedent, for his lifetime and also 
giving him the power of voting the stock, that he took but a life in¬ 
terest or a life estate therein and that at his death the tax should be 
applied as the daughters were not entitled to “possession and enjoyment” 
of the stock or of the proceeds thereof until his death. 

It was further held that a person may have a life estate in shares 
of corporate stock, the proceeds of a special fund, etc., as well as in real 
property; that where a transfer is made (1) “in contemplation of 
death” or (2) the “possession or enjoyment” of the property is post¬ 
poned at or until the death of the grantor the tax should be applied. 


PROPERTY AND PERSONS SUBJECT TO TAX 


35 


Re Brandeth, supra, has been repeatedly cited and approved in both 
that state and in others, some of which are as follows: Re Cornell, 170 
N. Y. 425; 63 NE. 445; Re Keeney, 194 N. Y. 285; 87 NE. 428; Re Skin¬ 
ner, 45 Misc. 562; 92 N. Y. Supp. 972. 

MASSACHUSETTS. 

New England Trust Co. v. Treasurer, 205 Mass. 282; 137 Am. St. Rep. 
437; 91 NE. 379; State Street Trust Co. v. Treas., 209 Mass. 378; 95 NE. 
851. 

WISCONSIN. 

In Re Bullen’s Estate, 143 Wis. 533; 139 Am. St. Rep. 1114; 128 NW. 
109. 

Effect of a Transfer of Property Under Agreement to Pay Annuity 
and to Care for Grantor During His Uifo Time —In the case of Lewis v. 
Brown, (1918) ... Iowa ...; 166 NW. 99, the plaintiff had entered into a 
contract with A. J. Litter and wife whereby Litter and his wife “agreed 
to give, will and bequeath at the death of the last one of us living, our 
farm of 240 acres * * * to said party of the second part, Ernest 

Lewis. * * * For and in consideration of which the said second 

party agrees to pay an allowance of $1200 per year to said first parties 
during their life time or the life time of either of them.” It also ap¬ 
peared that Lewis agreed to care for them in case they became enfeebled 
in mind or body as though they were his own parents by blood. 

Prior to the present suit to collect the inheritance tax, another action 
had been adjudicated between this plaintiff Lewis, and certain other 
claimants to the estate of Litter, and it was therein held that the title 
had been transferred to Lewis by the decedents in their life time, and 
also that Lewis went into immediate possession and enjoyment under 
the conveyance. Under such a showing, the supreme court held the land 
was not subject to the inheritance tax. This decision was under section 
1467 of the Code prior to the amendment of the 34th G. A., Chap. 36, 
whereby the following was inserted after the word “gift,” namely; “or 
transfer made in contemplation of the death of the donor.” 

There is dictum that a transfer made for a valuable consideration in 
the form of a reasonable annuity to the grantor for life is not a “trans¬ 
fer in contemplation of death” within the terms of the statute. However, 
since this action arose under the statute before the amendment this 
point w r as not necessarily involved in the decision rendered in the fore¬ 
going case and is therefore to be regarded merely as dictum. 

See also pages 34 and 37 hereof. 

Bequests in Payment of Debt, etc.—For Care of Grantor During Life 
Time —There are no Iowa cases dealing with this point in so far as 
relates to collateral inheritance tax, except as shown in the preceding 
section where “possession and enjoyment” was given to the grantee by 
the deed of the grantor during his lifetime. Therefore, it will be noted 
that the preceding section does not cover the matter involved in this 
section. 

The general rule that where a statute imposes a succession tax upon 
all property passing by will, that property bequeathed in pursuance of a 


36 


COLLATERAL INHERITANCE TAX LAW 


contract for services which have been fully performed at the time of 
the testator’s death is subject to the tax, since the beneficiary receives 
the property by virtue of the will and not by virtue of the contract. 
The cases cited hereunder illustrate the application of this rule. 

KANSAS. 

Louis Mollier, a Catholic priest, residing in Kansas, agreed to will 
all of his property to a niece provided she would come and make her 
home with him and act as his housekeeper. She served him in this 
capacity until his death twenty years later. He executed a will in ac¬ 
cordance with liis agreement and at his death the state successfully 
maintained an action to collect the tax on the theory that the niece ac¬ 
quired the property by virtue of his will and that she was not a “bona 
fide ” purchaser for full consideration in money or money’s worth, as 
required to be in order to come within the exemption provided by stat¬ 
ute. State of Kansas v. Mollier, Exrx., (1915) 96 Kans. 514; 152 Pac. 771; 
Tv. R. A. 1916C, 550. 

NEW HAMPSHIRE. 

In the case of Carter v. Craig (1914), 77 N. H. 200; 52 L. R. A. (ns) 
211; 90 Atl. 598; Ann. Cas. 1914D, 1179, it appears that John P. French, 
a resident of New Hampshire, entered into a contract with a resident 
of Vermont, whereby the latter agreed to care for French and his wife 
during (heir lives, in consideration of which French agreed to convey 
the farm, stock, and tools to the resident of Vermont. The contract was 
fully carried out and the property was bequeathed and devised as agreed 
upon. It was' held that Stone, the resident of Vermont, took the prop¬ 
erty by virtue of the provisions of the will and not under the contract, 
and was therefore liable for the succession tax. 

NEW YORK. 

Under the statute of this state providing that “a tax shall be and is 
hereby imposed upon the transfer of any property * * * when the 
transfer is by will” it was held a bequest of the late Jay Gould to his 
son, George Gould, of $5,000,000.00 stated in the will as being in pay¬ 
ment of a debt for services was not exempt from the tax. Matter of 
Gould, (1898) 156 N. Y. 423; 51 NE. 287. 

Again, it was held in Re Rogers (1902), 172 N. Y. 617; 64 NE. 1125, 
that the payment of a debt by legacy was subject to the transfer tax, 
the court stating that although the creditor was not bound to accept 
the legacy in payment of his debt, yet if he did so, there was no way 
of avoiding the tax. 

And in Re Doty (1894), 7 Misc. 193; 27 N. Y. Supp. 653, it was held 
that a bequest made in consideration of medical care and ’attention was 
not exempt from taxation. The court lays down the rule that in such 
cases the legatee must elect either to establish a claim for his services 
and obtain payment in the usual manner and thus waive the legacy, or 
accept the legacy and let it be regarded as a gift,' the taking of which 
subjects the legatee to the tax. 


PROPERTY AND PEPcSONS SUBJECT TO TAX 


37 


PENNSYLVANIA. 

The supreme court of Pennsylvania has somewhat limited the rule in 
that state. In the case of Quin’s Estate, (1880), 3 Phila. (Pa.) 340, it 
appears a gift was made by a testator to a creditor in full satisfaction 
of a legal claim, of the exact sum due the creditor. The court held this 
bequest was not subject to the tax and the decision seems to be based 
upon the fact that the claim of the creditor existed before as well as 
arter the death of the testator and that the creditor’s obligation was 
not to be subject to any condition; the provision of the will being re¬ 
garded as a direction to discharge a recognized, liquidated obligation. 

See also Gibbon’s Estate, (1883) 16 Phila. (Pa.) 218; 13 W. N. C. 99. 

ENGLISH RULE. 

The rule is established in England that if the decedent is a creditor 
of a legatee and in his will provided for the remission or forgiveness 
of the debt, it is to be treated as a legacy and taxed as such. Atty.- 
Gen. v. Holbrook, 12 Price 407; 3 Y. & J. 114; Morris v. Livie; 11 L. J. 
Ch. 172; 1 Y. and Coll. 380; 20 Eng. Ch. 380; 62 Eng. Reprint 934. 

Transfers of Property under Contract to Make a Will, etc.—There 
are no Iowa cases dealing directly with this question from the stand¬ 
point of inheritance taxation. But see page 35 hereof where property 
was conveyed under agreement to care for grantors, and the property 
actually transferred by grantors during their lifetime. 

MASSACHUSETTS. 

In the case of Clarke v. Treas. & Receiver General, (1917) 226 Mass. 
301, the testator entered into a contract with S. Elizabeth Willgoose to 
employ her as his housekeeper for the remainder of his life at $3.50 
per week and further stipulated that within nine days from the date 
of the contract that he would execute a will “and therein bequeath to 
the said S. Elizabeth the sum of $2,000, with the additional bequest of 
$500, or a proportional part thereof for each and every year after April 
1, 1907, until his decease.” Pursuant to this contract he made a will 
conforming to the contract. At his death the legacy amounted to $6,- 
030.14 and it was held to be taxable. The legatee was not a bona -fide 
purchaser within the meaning of the statute. The court in part states, 
“the contract implies that she was to take and receive it (the legacy) 
subject to the general law r s respecting such transfers.” Since the gen¬ 
eral laws taxed such transfers it was properly taxed even though made 
pursuant to a contract. 

NEW YORK. 

In the Matter of Kidd, 188 N. Y. 274; 80 NE. 924, the decedent, Kidd, 
agreed, during his life time, to adopt his step-daughter and to make her 
his heir and in case he had no other children to will all his property to 
her. Kidd failed to carry out this agreement and the step-daughter 
was forced to legal proceedings to obtain the property. It was held by 
the New York court that on succession to the proceeds of Kidd’s estate, 


38 


COLLATERAL INHERITANCE TAX LAW 


amounting to $800,000, that she was liable for the transfer tax. The 
fact that she had been forced to resort to legal proceedings would not 
in any way prevent the state from assessing the tax. 

Effect of Waiver of Bequest—In the case of Re Estate of Stone, 
(1906) 132 Iowa 136; 109 NW. 455, it was held that where a legatee, 
who would be liable to the tax, renounces the will and agrees that the 
entire estate be distributed to the widow and the lineal descendants 
according to the law of descent, the state had no right to levy a tax on 
the property which the legatee refused to accept. The opinion of the 
court is based on the fact that the tax is not on the property itself but 
on the right to the succession of property; hence, if the right to suc¬ 
cession be waived, the state has no claim for the tax. There is no in¬ 
timation in this case of fraud or of a collateral agreement among the 
heirs to reimburse this legatee in consideration of his waiver. 

Blakemore and Bancroft in their work on “Inheritance Taxes,” page 
1,26, speak of the case of Re Estate of Stone as the “most effective method 
of evading the collateral inheritance yet devised.” 

NEW YORK. 

The courts of this state have adhered to the rule that if a legatee dis¬ 
claims the bequest that a tax should not be levied as to such legatee 
but that the tax should be assessed on the succession to such gift as 
though it were actually bequeathed in the will to those to whom it 
eventually falls as a result of the renunciation. See Re Wolfe, 179 N. 
Y. 599, 72 NE. 1152 affirming 89 App. Div. 349. Also see Re Cook, 187 
N. Y. 253; 79 NE. 991 approving of Re Wolfe. The tax is on the trans¬ 
fer of the property, and if a transfer fails because of disclaimer there 
should be none assessed. 

Effect of Death of Beneficiary Before That of Testator—It frequently 
happens that a beneficiary named in a will dies before the testator and 
in such cases, where there is no contrary intention manifest by the 
terms of the will, the property passes to the heirs of such legatee. This 
is in accord with the provision of Sec. 3281 of the Code. It is easy 
enough to thus determine who shall ultimately receive the property but 
whether such beneficiaries receive the property as heirs of the lega¬ 
tee, or as heirs of the testator, is not so ready of solution. There is but 
one case in Iowa considering this proposition from the standpoint of 
collateral inheritance taxation. 

In the case of Re Hulett’s Estate, (1903) 121 Iowa 423; 96 NW. 952, 
Sarah J. Hulett executed a will in favor of her son, Wm. M. Hulett, 
making him the sole beneficiary to the exclusion of another son and a 
daughter. Wm. M. Hulett executed a will in favor of his mother. There¬ 
after, Sarah J. Hulett died and shortly following Wm. M. Hulett died 
without changing the terms of his will whereby his mother was made 
sole beneficiary. The question was then raised whether the brother and 
sister of Wm. M. took as his heirs, and were subject to the tax, or 
whether they received the property as the heirs of the mother and were 
thus exempt. Our court adhered to the view that they received the prop¬ 
erty as heirs, not of their mother, but as heirs of Win. M. Hulett, and 


PROPERTY AND PERSONS SUBJECT TO TAX 


39 


that therefore they were subject to the collateral inheritance of this 
state. This conclusion was reached after careful consideration of our 
statute. It seems also to be the rule in a number of the various states. 
See citations in Re Hulett’s Estate. 

The rule of England is contra to that in force in most of our states. 
It is given in this work in order to assist in giving a clearer view of 
our own holdings. 

ENGLISH RULE. 

By virtue of a peculiar statute, the courts of England arrive at a 
different solution of this problem. They recognize a fiction which in 
effect is that the devisee, who in fact dies before the testator, is con¬ 
sidered to survive the testator and to immediately die thereafter. This 
fiction is well exemplified in the case of Re Scott. In this case, John 
Scott, Jr., made a will in favor of his executors conveying all of his 
property, amounting to approximately $400,000.00, to be held in trust 
for his daughter Muriel Elsie Scott. Shortly after the death of John 
Scott, Jr., his father John Scott, Sr., died leaving a will disposing of his 
property amounting to about $400,000.00 to John Scott, Jr. The question 
was then raised whether Muriel Elsie Scott would be required to pay one 
succession tax on taking her father’s interest in the estate of John Scott, 
Sr., or whether she would be required to pay the tax twice. The English 
court held that, in view of their fiction in such cases that the tax should be 
levied twice, once when the property descended from John Scott, Sr., to his 
son, and again when the property descended from this son, John Scott, Jr., 
to his daughter. In Re Scott, 1 Q. B. 228; 5 British Ruling Case, 840. 
Reported also in 70 L. J. Q. B. N. S. 66; 65 J. P. 84; 49 Week. Rep. 178; 
83 L. T. N. S. 613; 17 Times L. R. 148. 

Vested Remainders—When Exempt lrom Inheritance Taxation— 
Where a remainder becomes vested in collateral heirs prior to enact¬ 
ment of the statute on collateral inheritance tax, the state cannot there¬ 
after subject the heirs to the payment of the tax at the expiration of 
the life estate on the theory that a statute providing for collateral in¬ 
heritance tax passed before termination of life estate granted such au¬ 
thority. Lacey v. State Treasurer, (1911) 152 Iowa 477; 132 NW. 843. 

When interests in real property become vested under a trust deed 
executed prior to enactment of the statute, such interests are exempt 
from the tax subsequently provided. This is the rule even though the 
interest acquired is subject to contingencies which might affect the future 
enjoyment of it. Morrow v. Depper, (1911) 153 Iowa 341; 133 NW. 729. 

CALIFORNIA. 

Same rule recognized in Hunt v. Wieht, ... C&l. ...; 162 Pac. 639; 
L. R. A. 1917C, 961, where grantor executed and delivered deed to a 
third party to hold in escrow' until his death, when it was to be de¬ 
livered to grantor’s wife. 

NEW YORK. 

Same rule followed. See Re Pell, 171 N. Y. 48; 89 Am. St. Rep. 791; 
63 NE. 789; 57 L. Ri A. 540. 


40 


COLLATERAL INHERITANCE TAX LAW 


MICHIGAN. 

The statute of this state is a substantial copy of that of New York. 
The courts therefore adhere to the same rule as to remainders vesting 
prior to enactment of statute as announced in New York and followed 
in Iowa. Miller v. McLaughlin, 141 Mich. 433; 104 NW. 777. 

MINNESOTA. 

An estate vested prior to enactment of statutes providing for an 
inheritance tax is exempt from the tax subsequently provided for. State 
ex rel. Tozer v. Probate Court, 102 Minn. 285; 133 NW. 888. 

“Double Taxation”—Payment of Tax in one State no Bar to Collection 
in Another—Where a resident of Chicago dies in that city, and leaves 
money on deposit in the city of New York, which he may withdraw, 
upon giving five days’ notice of intention so to do, it was held by the Su¬ 
preme Court of the United States in Blaekstone v. Miller, 188 U. S. 203, 
23 Sup. Ct. 277; 47 L. Ed. 439, that the state of New York was entitled 
to levy a tax on the right of succession to the money in that state, even 
though the state of Illinois might levy a tax on the right to succession 
by virtue of its statutes The rule is well established that payment of 
the tax in one state where the property is located does not bar the state 
of which the decedent was a resident from insisting on the payment of 
the tax in that state. 


CALIFORNIA. 

Re Estate of Hodges, ... Calif. ...; 150 Pac. 344; L. R. A. 1916A, 837. 


MICHIGAN. 


In Re Rogers’ Estate, 149 Mich. 305; 112 N. W. 931; 11 L. R. A. (N. 
S.) 1134. 


UNITED STATES. 


In Coe v. Errol, 116 U. S. 517, 524; 29 L. ed. 715, 717; 6 Sup. Ct. Rep. 
475; Knowlton v. Moore, 178 U. S. 53; 44 L. ed. 974; 20 Sup. Ct. Rep. 747- 
Non-Resident Aliens—It will be noted that the law provides for a 
higher rate of tax in case of non-resident aliens having succession to 
property in this state. However, if the United States has entered into a 
treaty relation with the foreign state of which the alien is a resident, 
and the treaty is in conflict with the provision of our statute, the treaty 
will control in the matter the right of succession to the property. 

Under the constitution of the United States, Article 6, provision is 
made that the constitution, laws made in pursuance thereof and treaties 
with foreign nations, shall be the supreme law of the land, notwith¬ 
standing anything in the constitution or laws of any state to the con¬ 
trary. Therefore, if the United States has entered into a treaty and 
thereby granted the citizens of a foreign country the right to inherit 
property in this country on the same basis as a citizen of any state, 


PROPERTY AND PERSONS SUBJECT TO TAX 


41 


the increased rate would be prohibited since treaties of the United States 
are superior to the laws of any state. Opel v. Shoup, (1896) 100, Iowa, 
407; 69 NW. 560; 37 L,. R. A. 583; Doehrel v. Hillmer, (1897) 102 Iowa, 
169; 71 NW. 204; in Re Estate of Anderson, (1914) 166 Iowa, 617; 147 
NW. 1098, affirmed 245 U. S. 170; 38 Sup. Ct. Rep. 109; 62 L. Ed. ... 

The United States has entered into treaties with many of the nations 
and considered the matter of inheritance by citizens of the respective 
countries. Extracts from these treaties are given in this compilation 
under the head of “Treaties.” For detailed information and citations 
to cases involving construction of these treaties see page 127 hereof. 

Unknown Heirs and Heirs Whose Residence is Unknown Sub¬ 
ject to the Tax—Sec. 1481-a42, Supplement, 1B13. Whenever the 
heirs or persons entitled to any estate, or any interest therein, 
are unknown or their place of residence cannot with reasonable 
certainty, be ascertained, a tax of 5% shall be paid to the treas¬ 
urer of state upon all such estates or interests, subject to refund 
as provided herein in other cases; provided, however, that if 
it be afterwards determined that any estate or interest passes 
to aliens, there shall be paid within sixty (60) days after such 
determination and before delivery of such estate or property, an 
amount equal to the difference between five percentum, the 
amount paid, and the amount which such person should pay un¬ 
der the provisions of this act. 

Under this section all unknown heirs, whether direct or collateral, are 
subject to the tax. 

For a case where a refund was made to an heir after the estate was 
held to have escheated to the state for want of claimants, see McKeown 
v. Brown, Treas., (1914) 167 Iowa 489; 149 NW. 593, more fully cited 
herein on page 143. 


CHAPTER III 


WHEN TAX IS NOT TO BE IMPOSED OR COLLECTED- 
EXEMPTIONS AND DEDUCTIONS. 

Introductory—The preceding chapter provided that the tax should 
be imposed and collected in every case of succession to property at the 
death of another. In this chapter exceptions to that rule will be con¬ 
sidered. The following section of the statute provides: 

When the Tax is not to be Imposed or Collected.—Sec. 1481-al 
Supplement, 1913. The tax imposed by this act shall not be 
collected, 

1st. When the entire estate of the decedent does not exceed 
the sum of one thousand dollars ($1,000) after deducting the 
debts as defined in this act. 

2nd. When the property passes to the husband or wife. 

3rd. When the property passes to the father, mother, lineal 
descendant, adopted child, or the lineal descendant of an adopted 
child of decedent. 

4th. When the property passes to educational and religious 
societies or institutions, public libraries and public art galleries 
within this state and open to the free use of the public. 

5th. Property passing to or for hospitals within this state open 
to the public, and not operated for gain, or to societies within this 
state organized for purposes of public charity, including cemetery 
associations, but not including societies maintained by fees, dues, 
or assessments in whose benefits the public may not share. 

6th. Bequests for the care and maintenance of the cemetery 
^r burial lot of decedent and his family, and bequests not to 
exceed five hundred dollars ($500.00) in any estate, to or for the 
performance of a religious service or services by some person 
regularly ordained, authorized or licensed by any religious so¬ 
ciety to perform such service to be performed for or in behalf 
of the testator, or some person named in his last will, provided 
such person so named is, or would be exempt from the tax im¬ 
posed by this act. 

7th. When the property passes to a municipal or political cor¬ 
poration within this state for a purely public purpose. 


EXEMPTION AND DEDUCTIONS 


43 


Div. 1. Value of Estate—Debts—If the value of the entire estate 
does not exceed $1,000.00 after deducting the debts the tax is not to be 
collected. The Treasurer of State has followed the rule that real 
property outside the state is to be considered in determining the value 
of the estate as the statute provides for exemption only in case the entire 
estate does not exceed the stated sum, etc. 

For annotations on what constitutes a debt, see page 46 hereof under 
sec. 1481-a2, Supplement 1913. 

Div. 2. When Property Passes to Husband or Wife—The question 
of the right of the state to collect the tax from a divorced wife who 
has been named a legatee in her former husband’s will has not been 
determined in this state. However, there is a well established line of 
authorities in this state holding that an absolute divorce puts an end to 
all rights resting upon the marriage and not actually vested, and that 
upon divorce all interests, or rights, in property of the other are fully 
barred and terminated. See Marvin v. Marvin, (1882) 59 Iowa 699; 
13 NW. 851; Hamilton v. McNeill, (1911) 150 Iowa 470; 129 NW. 480. 
It would therefore appear that in case a divorced wife is made a bene¬ 
ficiary under the will of her former husband that she should be subject 
to the tax fixed by law upon succession to the property. 

Div. 3. Parents and Children—The statute exempts an adopted 
child from the payment of the collateral inheritance tax. The term 
“adopted child” refers to a child who has been adopted in the manner 
required by law. The statute provides what shall be necessary to be 
done in order to confer upon the child all the rights, privileges, and re¬ 
sponsibilities which would appertain to the child if born in lawful wed¬ 
lock. Courts of equity cannot dispense with the regulations prescribed 
by statute. Long v. Hewitt, (1876) 44 Iowa 363. And one who claims 
property as an adopted child must show that the statute has been com¬ 
plied with, or the tax will be assessed. Lamb v. Morrow, (1908) 140 
Iowa 89; 117 NW. 1118; 18 L. R. A. (ns) 226. 

PENNSYLVANIA. 

There are several cases in Pennsylvania to the effect that an illegiti¬ 
mate child must pay the inheritance tax on succession to a legacy from 
his putative father. See Commonwealth v. Ferguson, 137 Pa. 595; 20 
Atl. 870; 10 L. R. A. 240. 

It has been further" held in Pennsylvania that when a grandfather 
adopts a grandchild that at the death of the grandfather, who died in¬ 
testate, that such adopted child would inherit his property only as a 
child and not both as child and grandchild. This opinion seems to be 
based upon a statutory provision that such adopted child should share 
the inheritance only as one of “the other children.” Since an own 
child could not inherit except as child, therefore this adopted grandchild 
was limited to the rights of an “own child.” Morgan v. Reel, 213 Pa. 
90; 62 Atl. 253. 

Div. 4. Educational and Religious Institutions—In construing divi¬ 
sion 4, the supreme court of Iowa in the recent case of In Re Peterson’s 
Will, ... Iowa ...; 166 NW. 168, (Jan. 17, 1918), held that an educa- 


44 


COLLATERAL INHERITANCE TAX LAW 


tional society organized under the laws of New York was exempt from 
the tax as the words “within this state” refers solely to public art gal¬ 
leries.” This decision is based largely upon a grammatical construction, 
holding that the comma between “institutions” places “educational and 
religious societies or institutions” in a class separate and distinct from 
“public libraries and public art galleries.” This opinion results in making 
an exemption at war with the exemption statutes of many states. A 
rehearing has been granted and this opinion is therefore suspended. 

Under Sec. 1467 of the Code, which provided for the exemptions in 
the original law, it was held that a bequest to the “Burlington, Iowa, 
branch of the Salvation Army” was exempt from the tax even though 
the Burlington branch was an unincorporated organization which was 
under the direction and control of the Salvation Army, a corporation 
organized under the laws of New York. In Re Estate of Crawford, (1910) 
148 Iowa 60; 126 NW. 774; Ann. Cas. 1912B, 992. In dictum the court said, 
“It must be admitted, we think, that a legacy to or for * *' * a religious 
or charitable institution organized under the corporation laws of another 
state is not exempt from the inheritance tax.” However, since the fund 
was designated for local work in the case above cited the court held it 
exempt from the tax. 

GENERAL RULE. 

The questions of bequests to foreign corporations has been so clearly 
stated in 37 Cyc, 1573, that it is set out at length, as follows: “A be¬ 
quest to a foreign corporation is not exempt from payment of the legacy 
tax, although such corporation, by reason of its character as a chari¬ 
table, religious, or educational institution, is exempt from taxation in 
the state of its domicile, or although domestic corporations of the same 
class are exempt; and it is immaterial that such corporation has been 
empowered by law to take and hold property in the taxing state, or 
that the fund provided in the bequest is to be used within the taxing 
state.” 

ILLINOIS. 

Charitable bequests to foreign corporations are not exempt from the 
collateral inheritance tax. In Re Speed, 216 Ill. 26; 108 Am. St. Rep. 
189; 74 NE. 809; People v. Society, 87 Ill. 246. 

MASSACHUSETTS. 

The case of Minot v. Winthrop, 162 Mass. 126; 26 L. R. A. 259; 38 
NE. 512, holds, charitable, educational, or religious societies of other 
states not exempt from the succession tax. 

MISSOURI. 

The case of Re Assessment of the Collateral Inheritance Tax in the 
Estate of James Quick, .. Mo. .., 105 S. W.; 51 L. R. A. (ns) 817, fol¬ 
lows the rule of New Hampshire. 


NEW HAMPSHIRE. 

The supreme court of this state, under statutory provisions providing 
for the exemption of the property of charitable associations “in this state” 


EXEMPTION AND DEDUCTIONS . 


45 


“devoted exclusively to the uses and purposes of public charity” has gone 
a step beyond that of any other state and held that money devised to a 
local auxiliary of a foreign missionary society for the purpose of con¬ 
verting “heathen women” in foreign lands was subject to the collateral 
inheritance tax. Carter v. Whitcomb, 74 N. H. 490; 17 L. R. A. (ns) 737; 
69 Atl. 779. The court of this state adheres to the thought that the 
exemption is intended to benefit the residents of the state in a substan¬ 
tial manner, and if such gift does not accomplish this purpose it is to 
be taxed. 


NEW JERSEY. 

Charitable institutions in foreign states are not exempt from the 
payment of the tax on taking property in this state. Alfred University 
v. Hancock, 69 N. J. Eq. 473; 46 Atl. 178. 

NEW YORK. 

Formerly charitable corporations organized under the laws of other 
states were required to pay the tax in order to have succession to prop¬ 
erty within the state of New York. In Re Prime’s Estate, 136 N. Y. 
347; 49 N. Y. S. R. 658; 32 NE. 1091; 18 L. R. A. 713, repeatedly cited 
and approved. Under the present statute such bequests are exempt from 
the tax, with the exception that if any officer, member or employee of 
the corporation receives any pecuniary profit other than a reasonable 
compensation for services, etc., the exemption shall not apply. 

OHIO. 

Foreign charitable corporations not exempt from the tax. Humphreys 
v. State, 70 Ohio St. 67; 70 NE. 957; 65 L. R. A. 776; 101 Am. St. Rep. 
888; 1 Ann. Cas. 233. 

Div. 5. Charitable Institutions, Hospitals, etc.—Prior to the enact¬ 
ment of the foregoing section all exemptions to the tax were stated in 
Sec. 1467 of the Code which exempted “charitable, educational, or relig¬ 
ious societies or institutions within this state.” Under this section the 
supreme court held the Masonic Lodge a “charitable institution” in the 
case of Morrow v. Smith, (1910) 145 Iowa 514; 124 NW. 316; 26 L. R. 
A. (ns) 696. The present statute would probably not be construed to 
exempt such an institution as it is “maintained by fees,” etc., and “the 
public may not share” in its benefits 

See also annotations under Div. 7 hereof. 

Div. (i. For Cemetery Lots—Mass, etc.—Prior to the enactment of 
this statute, the supreme court in Morrow v. Durant, (1908) 140 Iowa 
437; 118 NW. 781, held that the setting aside of $2000.00 for erection of 
a “tomb” for decedent was not as a matter of law an unreasonable sum. 
What is reasonable or unreasonable is a mixed question of law and fact. 
Sums set aside for tombs are not subject to tax. 

Adherents of the Catholic faith frequently made bequests in favor of 
priests to compensate them for saying Mass in their behalf. Such be- 


46 


COLLATERAL INHERITANCE TAX LAW 


quests are valid in this state. See the case of Moran v. Moran, (1897) 
104 Iowa 216; 73 NW. 617; 65 Am. St. Rep. 443; 39 L. R. A. 204. Under 
the exceptions of section 6 such bequests should not be taxed if less 
than $500.00. However, in some states these “prayer trusts” are de- 
lared to be invalid chiefly for the reason that there is a want of living 
beneficiaries. 6 Cyc. 920. 

Div. 7. Requests to Municipal Corporations—Under the formei 
statute exempting bequests to or for “charitable * *' * societies and 

institutions” the supreme court held a bequest of certain property “in 
perpetuity to the dependent poor persons of Delaware County (Iowa) 
who are maintained wholly or in part at the expense of said county 
and designating the board of supervisors as trustees of said property, to be 
exempt from the tax as bequest to a charitable institution. The court 
also held that a county being charged with the duty of relieving and 
supporting the poor, is to that extent a charitable organization. In Re 
Estate Spangler, (1910) 148 Iowa 333; 127 NW. 625. This decision was 
rendered prior to the enactment of the exception in favor of bequests 
to municipal and political corporations within this state for a purely 
public purpose. 

It has never been determined what constitutes “a purely public pur¬ 
pose” by our supreme court so far as collateral inheritance is concerned. 
Perhaps the definition of “a purely public charity” as defined by the 
Kentucky supreme court may assist in arriving at a proper view of the 
Iowa statute. 

KENTUCKY. 

The constitution of this state exempts from taxation “institutions of 
purely public charity.” In view of this provision it has been held that 
the property of a commandery of the Knights Templar is not exempt 
even though it frequently makes gifts for charitable purposes. In dis¬ 
cussing tbe definition of a “public charity” the court considers the gen¬ 
erally accepted classification of charitable gifts as follows: “(1) gifts for 
eleemosynary purposes; (2) gifts for educational purposes; (3) gifts for 
religious purposes; and (4) gifts for public purposes.” It is manifest 
the Knights Templar could not be classed as a purely charitable institu¬ 
tion under any of the four classifications. Vogt v. City of Louisville, 
173 Ky. 119. 

“Debts” defined. Sec. 1481-a2, Supplement, 1913. The term 
“debts” as used in this act shall include, in addition to debts 
owing by the decedent at the time of his death, the local or state 
taxes due from the estate in January of the year of his death, a 
reasonable sum for funeral expenses, court costs, the cost of ap¬ 
praisement made for the purpose of assessing the collateral in¬ 
heritance tax, the statutory fees of executors, administrators, or 
trustees estimated upon the appraised value of the property, 
the amount paid by the executor or administrator for a bond, the 
attorney fee in a reasonable amount, to be approved by the 


EXEMPTION AND DEDUCTIONS 


47 


court, for the ordinary probate proceedings in said estate and no 
other sum; but said debts shall not be deducted unless the same 
are approved and allowed by the court within eighteen (18) 
months from the - death of the decedent, as established claims 
against the estate, unless otherwise ordered by the judge or 
court of the proper county. 

When Taxes are to be Deducted as a “Debt”—Not all taxes are to 
be deducted as a debt of the decedent, it is only “local or state taxes due 
from the estate in January of the year of his death.” The Treasurer of 
State considers as “debts” ordinary taxes, and special assessments when 
due and payable, but he does not consider sums due or payable to the 
federal government as income tax, or as federal inheritance tax, as 
“debts”; nor is the amount of inheritance tax paid in other states to be 
deducted. 

NEW YORK. 

Taxes which are not assessed, nor a lien, nor payable at the time of 
the decedent’s death are not to be deducted as a “debt” of the estate. 
Re Maresi’s Estate, 74 App. Div. 76; 77 Sup. 76. 

But taxes actually levied, due, owing, and capable of payment at the 
time of the decedent’s death are proper deductions as “debts” of the 
estate. Re Liss Estate, 78 Sup. 969; 39 Misc. 123. 

Sums due the federal government as inheritance taxes are not to be 
deducted. Matter of Gihon, 169 N. Y. 443; 62 NE. 561. 

Inheritance taxes imposed by a foreign state are not proper deductions 
as “debts” of the estate. Matter of Penfold, 216 N. Y. 171; 110 NE. 499; 
and Matter of Gihon, 169 N. Y. 443; 62 NE. 561. 

PENNSYLVANIA. 

A different rule has been announced in this state under a statute 
that imposed the tax upon “the clear value of the property or estate pass¬ 
ing to the legatee or devisee.” Hence under this section it has been 
held that the transfer tax imposed by the State of New Jersey on shares 
of stock should be deducted in ascertaining the value of the stock in 
Pennsylvania. Van Beil’s Estate, (1917) 257 Pa. 155. 

Funeral Expenses as Debts—What constitutes a reasonable sum as 
funeral expenses depends upon circumstances. It is a mixed question 
of law and fact. Hence to set aside $2000.00 for erection of tomb is not 
unreasonable as a matter of law. Morrow v. Durant, (1908) 140 Iowa 
437; 118 NW. 781. This case recognizes that the cost of tomb may be 
considered as a debt. 

NEW YORK. 

There is one case in New York which allowed as “reasonable” the 
following items connected with the funeral of the deceased: $470.00 for a 
burial lot, $200.00 for a fence around the lot, and $35.00 for sodding the 


48 


COLLATERAL INHERITANCE TAX LAW 


lot. This' expenditure was held to be reasonable in view of the facts in 
the case and where it appeared there was $10,351.00 in the residuary es¬ 
tate. Re Liss* Estate, 78 Sup. 96S; 39 Misc. 123. 

Court Costs as “Debts”—All court costs incurred in the process of 
administration are not necessarily to be taxed against the estate. See 
Sec. 1481-a35, Supplement 1913, page 124 hereof. Nor are all court costs 
to be deducted as “debts” as may be found from a reading of the opin¬ 
ions from New York and Pennsylvania. 

In Re Estate of Wells, (1909) 142 Iowa 255; 120 NW. 713, the testator 
left two wills whereby all of his property was disposed of to persons 
subject to the tax. A contest arose and a stipulation was entered into 
whereby one will was admitted to probate. The question then arose as 
to who was liable for the tax. The court held that the persons who were 
entitled to the property at the time of the testator’s death were liable 
therefor. In making the stipulation it was agreed that two of the con¬ 
testing heirs, who were not entitled to any property under the will were 
to be paid $75,000 each. The administrator claimed these sums to be 
debts of the estate, and exempt from taxation, and that they should be 
deducted from the assets in determining the tax on the remainder of 
the estate. The court held that payments made in the adjustment of 
conflicting claims cannot be construed as debts, nor treated as expenses 
in its settlement. Therefore the sums paid to the contesting heirs was 
subject to the tax but on the theory that it was property of the devisee 
which she directed the executor to pay to the contesting heirs. 

NEW YORK. 

Although the court may tax costs against an estate in favor of suc¬ 
cessful contestants of a will, yet the costs of such a contest are not to 

be deducted as “debts” of the estate or as court costs. Such costs are 
practically a charge upon the interests of such contestants for the bene¬ 
fit of their attorneys and therefore are not deductible. Matter of Wes- 
turn, 152 N. Y. 93; 46 NE. 315. 

If the court cost is incurred in protecting the estate such expense 
may be deducted in calculating the tax. Matter of Gihon, 169 N. Y. 443; 
62 NE. 561. 

On the other hand if it appears that the court costs were caused by 

a dispute among the heirs or beneficiaries the costs should not be de¬ 

ducted. It was so held in the Matter of Thrall, 157 N. Y. 46; 51 NE. 411, 
wherein an attempt was made to have $3,500.00 deducted as costs, the 
sum being the estimated expense incurred by the executors in their rep¬ 
resentative capacity, and as individuals, in ascertaining the construc¬ 
tion of the will. 

PENNSYLVANIA. 

The supreme court of this state has stated that “an executor is not 
bound to defend his testator’s will. If he undertakes to do so, it must 
be as the agent and in the interest of those benefited by his actions.” 
Hence costs incurred as attorney fees in sustaining a will are not to be 
deducted. Tabers Estate, (1917) 357 Pa. 81. 


EXEMPTION AND DEDUCTIONS 


49 


Cost of Appraisement—As a “Debt”—Appraisers’ fees should be 
deducted as a debt of the estate. Section 1290-a, Supplemental Supple¬ 
ment, 1915, fixes the fees of the appraisers, it is as follows: “That the 
compensation of appraisers appointed to appraise property belonging to 
any estate as a basis for the assessment of the collateral inheritance 
tax shall be three dollars per day for each appraiser and mileage as 
hereinafter provided and in other cases where the compensation of ap¬ 
praisers is not now fixed by statute, shall be two dollars per day for 
each appraiser and five cents a mile for the distance traveled in going 
to and returning from the place of appraisement, to be paid out of the 
property appraised or by the owner or owners thereof.” 

Fees of Executor or Administrator—As a “Debt”—Relying upon an 
opinion furnished by the Attorney-General’s Office, the Treasurer of 
State adheres to the rule that the fees of an executor, administrator or 
trustee, which may be deducted as a debt from an estate subject to the 
payment of a collateral inheritance tax, must be based upon and limited 
to the personal estate and so much only of the real estate as may be 
sold for the payment of debts. This view was reached after consider¬ 
ing sec. 3415 of the Code which provides that the executor shall receive 
a certain per cent of the value of the property passing through his 
hands in compensation for his services as executor. 

Money Expended under Orders of Court as Debts—Family Allowance 
—There are no cases in Iowa upon this question but the Treasurer of 
State has adopted the rule that widow’s allowance, provided for by 
statute, may be deducted as a debt in determining the value of the estate. 
The following cases illustrate the rule in other states. 

CALIFORNIA. 

The rule in this state is that funds lawfully diverted by the probate 
court from the purposes declared by will or the laws of succession are 
to be treated as debts of the estate and deducted accordingly. Hence, it 
has been held that a family allowance, provided for by statute, and dis¬ 
tributed during the administration of the estate to the decedent’s family 
was not subject to the tax. Re Estate of Kennedy, 157 Cal. 517; 108 Pac. 
280; 29 L. R. A. (ns) 428. This case cites with approval the case of 
Morrow v. Durrant, 140 Iowa 437; 118 N l W. 781; 23) L. R. A. (ns) 474, 
where the Iowa court permitted the cost of a monument to be deducted 
as a debt. 

ILLINOIS. 

A contra rule was adopted in Illinois in the case of Billings v. People, 
(1901) 189 Ill. 472; 59 L. R. A. 807; 59 NE. 798, and adhered to in People 
v. Forsyth, 273 Ill. 141; 112 NE. 378. 

MINNESOTA. 

The widow’s allowance was held to be deductible in the case of the 
State v. Probate Court, — Minn. —; 163 NW. 285; L. R. A. 1917F, 436. 

4 


50 


COLLATERAL INHERITANCE TAX LAW 


MONTANA. 

Same rule recognized as to widow’s allowance in Re Blackburn, — 
Mont. —; 152 Pac. 31. 

TENNESSEE. 


Widow’s allowance is to be deducted. Re Crenshaw v. Moore, 124 
Tenn. 528; 137 SW. 924; 34 L. R. A. (ns) 1161. 

WISCONSIN. 

The widow’s allowance deducted. Re Smith, 161 Wis. 588; 155 NW. 
109. 

Payment of Sum Fixed by Ante-nuptial Contract as a Debt—This 
question has never been presented to our court for consideration. There 
is confusion in the decisions of the courts 1 on the question as disclosed 
by the cases from Illinois and from New York. After a review of the 
cases the thought suggests itself, why should such payments be held to be 
exempt from the tax when a bequest made in pursuance of a contract to 
execute a will is uniformly taxed? It is a matter that will bear serious 
thought. 

ILLINOIS. 

In People v. Field, 248 Ill. 147; 93 NE. 721; 33 L. R. A. (ns) 230, it 
appears that prior to marriage the late Marshall Field entered into an 
ante-nuptial contract with his intended wife, whereby she was to take the 
sum of one million dollars in event she survived him, in lieu of all rights 
or interests she might have in his estate in the absence of such an agree¬ 
ment. It was held by the supreme court of Illinois, that under their 
statute, which taxes all dower rights of a widow exceeding in value 
$20,000.00, that the sum mentioned in the contract should be taxed. In 
the strict sense of the term this million dollars was but a “substitute for 
and in lieu of dower and other rights, it must for the purpose of the 
inheritance tax, be treated the same as dower would, and is not to be 
considered an indebtedness to be deducted from the market value of 
the estate.” Therefore the executor was not allowed to deduct the amount 
in determining the value of Marshall Field’s estate. 

This case finds approval in Peoi le v. Union Trust Co., 255 III. 168; 
99 NE. 377; L. R. A. 1915D, 450. 

NEW YORK. 

Directly opposed to the holding of the Illinois supreme court is the 
case of Re Baker, 83 App. Div. 530; 82 Sup. 390, affirmed in 178 N. Y. 
575; 70 NE. 1094, wherein the New York court of appeals held that the 
sum stipulated in an ante-nuptial contract was a debt of the estate and 
should not be subject to taxation any more than a debt represented by a 
note or a bond. 

Amount Due on a Mortgage — As a “Debt” —Repairs'— Contingent 
Liability —There are no cases in Iowa upon these three propositions. 


EXEMPTION AND DEDUCTIONS 


51 


However, authority is not wanting in other jurisdictions. The Treasurer 
of State has adhered to the rule that repairs are not to he deducted as 
debts of the estate. The following cases from Massachusetts and New 
York may serve as an aid in such matters. 

See also page 63 hereof. 


MASSACHUSETTS. 

The rule in this state is that the amount of indebtedness under a 
mortgage is to be subtracted from the value of the real estate in deter¬ 
mining the amount upon which the tax shall be computed. Thus where 
the decedent, owner of property in Massachusetts, resided in New Jersey, 
the state of Massachusetts was held not to be entitled to have the en- 
cumberance on the real property considered as an ordinary debt to be 
deducted from the personal estate; but that the estate within the taxing 
jurisdiction of Massachusetts was 1 the equity of redemption, or the value 
of the land less the mortgage. The attempt of the state to compel per¬ 
sonal property to be brought from New Jersey sufficient to pay the 
indebtedness on the land in Massachusetts was held to be improper. 
McCurdy v. McCurdy, (1908), 197 Mass. 248; 83 NE. 881; 16 L. R. A. (ns) 
329. 


NEW YORK. 

The rule in New York is that the amount due on notes secured by 
mortgages on land of the decedent are to be deducted from the taxable 
value of the land and not from the personal property of the estate as an 
ordinary debt. Matter of Offerman, 25 App. Div. 94; 48 Sup. 993; followed 
in Matter of Murphy, 32 App. Div. 627; 53 Sup. 1110, and affirmed in 157 
N. Y. 679 without an opinion. This is the rule even though the testator 
directs his executors to pay the mortgage out of his personal estate. 
The appraisers therefore should not deduct the amount of mortgages due 
on real property from the value of the personal estate. Matter of Maresi, 
74 App. Div. 76; 77 Sup. 76. 

Where a testator bequeaths real property to another which is subject 
to a mortgage, and there is no direction in the will as to the payment of 
the mortgage, the beneficiary takes the property subject to the mortgage. 
Matter of Kene, 8 Misc. 102; 29 Sup. 1078. 

Contingent liability on a bond as a surety should not be deducted as a 
debt. Nor should liability on a note secured by a mortgage be deducted 
where the decedent has deeded the' mortgaged premises to another. See 
Gleason and Otis on “Inheritance Taxation,” page 296 and citations of 
New York cases therein given. 

Likewise repairs on real property contracted for by the decedent dur¬ 
ing his lifetime and not completed until after his death are to be de¬ 
ducted from the value of the real property and not from the personal estate 
of the decedent. See Matter of Kemp, 7 App. Div. 609; 40 Sup. 1144; af¬ 
firmed in 151 N. Y. 619; 45 NE. 1132. Such repairs or improvements 
should be considered by the appraisers in determining the value of the 
real property. 


CHAPTER IV 


ASSESSMENT AND COLLECTION OP THE TAX—COMPU¬ 
TATION OP TAX—WHEN AND WHERE PAID—REFUNDS. 


The Reporting of Property and Persons Liable for the Payment of 
Inheritance Tax—Our statute provides that the executor or administra¬ 
tor shall report both property and persons liable for the payment of the 
inheritance tax. Likewise, the heirs are under obligation to report 
property they receive which is subject to the tax when no executor or ad¬ 
ministrator has been appointed. Furthermore, the Treasurer ot’ State 
may ask for the appointment of an administrator in case an estate sub¬ 
ject to the tax is not being administered upon within four months after 
the death of the decedent. The clerk of the court should also report es¬ 
tates subject to the tax. 

It will be noted that sec. 1481-a26, Supplement, 1913, covers largely the 
same matter that appears in sec. 1468 of the Code. Both sections are to 
be construed together if possible and thus both given force and effect. 
However, if such a construction cannot be made, or there is a conflict 
between the sections, the rule is that the one last enacted should prevail. 
This doctrine has long obtained in Iowa. See Edgar v. Greer, (1859) 8 
Iowa 393a. 

In case the assets of an estate consist wholly of personal property no 
inventory is required to be filed other than the one required by law to be 
filed in ordinary estates. However, before the administrator, or executor, 
may be discharged he must file with the Treasurer of State a complete 
statement of the assets and liabilities of the, estate in the manner pro¬ 
vided for in Form No. 23, set forth on page 116 hereof. 

Duty of Executor, etc., to Report Real Estate Subject to Tax— 
Entry to be Made in Lien Book.—Sec. 1468 of the Code. It shall 
be the duty of the executor, administrator or trustee, immediately 
upon his appointment, to make and file a separate inventory, any 
will to the contrary notwithstanding, of all the real estate of the 
decedent liable to such tax, and to cause the lien of the same to 
be entered upon the lien book in the office of the clerk of the 
court in each county where each particular part of said real estate 
is situated, and no conveyance of said estate or interest therein, 
which is subject to such tax before or after the entering of said 
lien, shall discharge the estate so conveyed from the operation 
thereof. 

For procedure under this section and for a form to be used in report¬ 
ing real property and persons subject to the tax, see page 56 hereof. 


ASSESSMENT AND COLLECTION 


53 


Heirs at Law to Report to Clerk Property Subject to the Tax— 
Failure to Report—Penalty —Sec. 1481-a28, Supplement, 1913. 
Whenever any property passing under the intestate laws may 
be subject to the tax imposed by this act, the person or persons 
entitled to such property shall make or cause to be made to the 
clerk of the courts of the county wherein such property is located, 
within ninety (90) days next following the death of such in¬ 
testate, a report in writing embodying therein substantially the 
information required by the second preceding section (sec. 1481- 
a26, Supplement, 1913, page 54 hereof) of this act. Failure 
to furnish such report or to probate the will in a testate estate 
shall not relieve the estate from the lien created hereby or the 
persons entitled to the property of such decedent from payment 
of the tax, interest or other penalties imposed by this act. 

Suppression or Alteration of Wills—Penalty For—The foregoing 
provision provides that failure to probate a will does not relieve the 
estate from the inheritance tax lien, or entitle the persons to receive the 
property of the decedent exempt from the payment of the tax or other 
penalties provided by law. In addition to this it should be remembered 
that any person who fails to produce a will for probate after reasonable 
notice may be committed to jail until he does so. Section 3282 of the 
Code. And further, that if any person wilfully suppresses or destroys a 
will with intent to injure or defraud any person, he may be imprisoned in 
the penitentiary for not more than seven years, or be fined not exceeding 
one thousand dollars and imprisoned in the county jail for not more than 
ment, 1913, page 56 hereof. 


PROCEDURE. 

Proceed to make the report as set forth under sec. 1481-a26, Supple¬ 
ment, 1913, page 56 hereof. 

When No Administration Asked For—Administrator Appoint¬ 
ed on Application of Treasurer of Statei—Non-resident Adminis¬ 
trators or Executors to File Bond Before Appointed. —Sec. 
1481-a3, Supplement, 1913. If upon the death of any person 
leaving an estate that may be liable to a tax under the provisions 
of this act, a will disposing of such estate is not offered for pro¬ 
bate, or an application for administration made within four 
months from the time of such decease, the treasurer of state may, 
at any time thereafter, make application to the proper court, 
setting forth such fact and praying that an administrator may 
be appointed, and thereupon said court shall appoint an admin¬ 
istrator to administer upon such estate. When the heirs or per- 


54 


COLLATERAL INHERITANCE TAX LAW 


sons entitled to inherit the property of an estate subject to the 
tax hereby imposed, desire to avoid the appointment of an ad¬ 
ministrator as provided in this section, they or one of them shall, 
before the expiration of four months from the death of the de¬ 
cedent file under oath the inventories and reports and perform 
all the duties required by this act, of administrators, including 
the filing of the lien; proceedings for the collection of the tax 
when no administrator is appointed, shall conform as nearly as 
may be to the provisions of this act in other cases. A non-resi¬ 
dent of this state shall not be appointed as executor, administra¬ 
tor or trustee of any estate that may be subject to the tax im¬ 
posed by this act, unless such non-resident first file a bond con¬ 
ditioned upon the payment of all tax, interest and costs for 
which the estate may be liable, such bond to be signed by not less 
than two resident freeholders or by an approved surety company 
and in an amount not less than twenty-five per cent (25%) of the 
total value of the estate, or of the property within this state if 
the estate is a foreign estate. 

Where the treasurer of state makes application asking that the ad¬ 
ministrator be required to file an inventory of all personal property, etc., 
and a list of heirs and beneficiaries, and the administrator files a re¬ 
sistance to the application on the grounds that there are no persons in¬ 
terested in said estate subject to the tax, an order striking the resistance 
affects a substantial right from which an appeal will lie. Re Estate Stone, 
(1906) 132 Iowa 136; 109 NW. 455. The state must show that the estate 
is subject to the tax before it can compel the executor to file an inventory. 
Re Est. of Stone, supra. 


PROCEDURE. 

The following section of the Supplement, 1913, sets forth the facts 
that should be embodied in the report. A form for such a report is also 
given under annotations of the succeeding sections. 

Clerk to Make Entry of Tax Lien—Report by Executors, etc., 
of Beneficiaries and Real Property Subject to Tax Within 30 
Days—Sec. 1481-a26, Supplement, 1913. Upon the appointment 
and qualification of such executor, administrator and testamen¬ 
tary trustee, the clerk issuing the letters shall at the same time 
deliver to him a blank form upon which he shall be required to 
make detailed report of the following facts: 

(1) Name and last residence of decedent. 

(2) Date of death. 

(3) Whether or not he left a will. 


ASSESSMENT AND COLLECTION 


55 


(4) Name and postoffice of executor, administrator ortrustee. 

(5) Name and postoffice of surviving wife or husband if any. 

(6) If testate, name and postoffice of each beneficiary under 
will. 

(7) Relationship of each beneficiary to the testator. 

(8) If intestate, name and postoffice of each heir at law. 

(9) Relationship of each heir at law to decedent. 

(10) Inventory of all the real estate of the decedent giving 
amount and description of each tract. 

(11) Whether the property passes in possession and enjoy¬ 
ment in fee for life or for a term of years. 

Within thirty days after his qualification, each executor, ad¬ 
ministrator, and testamentary trustee shall make and return to 
the clerk, under oath, a full and detailed report as indicated in 
the preceding paragraph, any will to the contrary notwithstand¬ 
ing, and upon his failure to do so, the clerk shall forthwith re¬ 
port his delinquency to the district court if in session, or to a 
judge of said court if in vacation, for such order as may be neces¬ 
sary to enforce an observance of this section. If it appears from 
the inventory or report so filed that the real estate or any part 
of it is subject to an inheritance tax, it shall be the duty of the 
executor or administrator or of any person interested in the 
property if there be no administration, to cause the lien of the 
same to be entered upon the lien book in the office of the clerk of 
the court in each county where each particular tract of said real 
estate is situated, and when said real estate or any interest 
therein, is subject to such tax, no conveyance either before or 
after the entering of said lien, shall discharge the real estate so 
conveyed from said lien, no final settlement of the account of any 
executor, administrator or trustee shall be accepted or allowed 
unless a strict compliance with the provisions of this section has 
been had by such person. Upon the filing of such report, the 
clerk of the court shall immediately forward a true copy thereof 
to the treasurer of state. 

(See also section 1468 of the Code, quoted on page 52 hereof.) 

Failure to File Report—Effect—Failure to file a report may subject 
an executor’s bondsmen to liability in case any one is injured by the 
omission. Not only that, but further, such executor may be removed 
from office for his failure to make such report, or to file the required in¬ 
ventories. See sec. 3416 of the Code. A proceeding to remove an exec¬ 
utor or administrator may be commenced by the sureties on his bond, 


56 


COLLATERAL INHERITANCE TAX LAW 


creditors of the estate, heirs, legatees under a will or any other person 
who has a pecuniary interest in the proper administration of the estate. 
Ebersole’s Encyclopedia of Iowa Law* sec. 1297. 

The following citation from the supreme court of Pennsylvania illus¬ 
trates further liability that may be incurred by failure to report. 

PENNSYLVANIA. 

One who purchases property and is given a deed of general warranty 
containing the words “Grant, bargain and sell” has a right to recover 
of the grantor's administrator such sum as he may be required to pay in 
settlement of a collateral inheritance tax lien upon land conveyed to him 
by the deed. Large v. McClain, (Pa.) 5 Cent. Rep. 761. 

PROCEDURE. 

The Treasurer of State recommends that those charged with the duty 
of reporting the names of the beneficiaries of an estate and the real 
property use the following form. The clerk of the district court should 
have a supply of these forms on hand but in event none can be obtained 
from that officer, they will be forwarded by the Treasurer of State on re¬ 
quest. By filling this form out fully and completely much time and ex¬ 
pense will be saved. Do not list personal property in this report. It is 
primarily intended to furnish the clerk with information of real property 
on which the tax is a lien so that he may enter it in the Collateral In¬ 
heritance Lien Record. 


Form No. 1. 

PRELIMINARY REPORT OF BENEFICIARIES AND REAL 

PROPERTY. 


ESTATE OF. Probate No. 

Jn the District Court of the State of Iowa, in and for . 

County. 

(Note.—This report must be made within 30 days after appointment.) 

( Preliminary Report of Beneficia- 
In the Matter of the Estate of \ ries, etc., and Real Property 

Deceased. \ subject to Collateral Inherit- 

( ance Taxation. 

( Executor 

Comes now the above named \ Administrator and to the Court reports 

I Trustee as follows: 


Name of Decedent 


Last Residenc 


Date of Death 

Testate or 


Intestate 




















ASSESSMENT AND COLLECTION 


57 


Name of Executor, Admin¬ 
istrator or Trustee 

P. 0. Address 

Name of Surviving 
Wife or Husband 

P. 0. Address 










BENEFICIARIES 


Names of Beneficiaries or 
Heirs at Law 

Relationship to 
Decedent 

P. 0. Address 

Remarks 










INVENTORY OF REAL PROPERTY 

(The Clerk should enter all land listed as being within his County in the Collat- 
teral Inheritance Tax Lien Record at once). 


Description 

Sec. 

Twp. 

Rng. 

Lot 

Block 

REMARKS 

(See Instruction 1 on Back of 
this Blank) 
















ESTIMATE OF VALUE OF THE PERSONAL PROPERTY 
I (or we) estimate the Gross Value of the Personal Property of this 
Estate at $. 


ST A TE OF IOWA, 
. COUNTY. 


ss.: 


Executor 

Administrator 

Trustee 


7, .. being first duly sworn depose and 

say, that I am the above named •< Administrator and that I am a c- 

( Trustee 

quainted with the facts and statements contained in the foregoing report 
and that they are correct and true to the best of my knowledge and belief. 


Subscribed and sworn to by . 

day of .. 19 - 


before me this 


[seal] 


Notary Public in and for said County 





























































58 


COLLATERAL INHERITANCE TAX LAW 


INSTRUCTIONS. 

Instruction 1. If any of the real property has been given to another 
for a term of years or for life, make a note of this fact in the column 
for “Remarks,” stating whether for life or for years. Put this notation 
immediately after description of real property thus conveyed. 

Instruction 2. The clerk should send a certified copy of this report to 
the Treasurer of State immediately after receiving the original into his 
hands. 

Instruction 3. Executors, etc., must make this report within 30 days 
after appointment. 

Instruction 4. Do not list personal property in this report. 

Instruction 5. Make your report complete. 

CERTIFICATE TO TREASURER OF STATE 

See Instruction No. 2. 

STA TE OF IOWA, 

. COUNTY. 

I, .. Clerk of the District Court in and for 

said county, do hereby certify that the within instrument is a true and 

{ Trustee 

Administrator in the 
Executor 

Estate of . 

Dated this . day of . 19 - 



Clerk of said District Court. 

Duty of Clerk to Report Estate Subject to Tax—Fees for Re¬ 
porting. —Sec. 1481-a31, Supplement, 1913. It shall be the duty 
of each clerk of the district court to make examination from time 
to time of all reports filed with him by administrators, executors 
and trustees, pursuant to law; also to make examination of all 
foreign wills offered for probate or recorded within his county, 
as well as of the record of deeds and conveyances in the re¬ 
corder’s office of said county, and if from such examination or 
from information or knowledge coming to him from any other 
source, he finds or believes that any property within his county, 
or within the jurisdiction of the district court of said county has, 
since July 4, 1896, passed by will or by the intestate laws of this 
or any other state, or by deed or other method of conveyance, 
made in anticipation of or intended to take effect, in possession 
or in enjoyment after the death of the testator, donor or grantor, 
to any person other than to or for the use of the persons, societies, 
or organizations exempt from the tax hereby imposed, he shall 
make report thereof in writing to the treasurer of state, em- 








ASSESSMENT AND COLLECTION 


59 


bodying in such report such information as he may be able to 
obtain as to the name and residence of decedent, date of death, 
name and address of administrator, executor, or trustee, the 
description of any property liable to said tax and the county in 
which it is located and name and relationship of all beneficiaries 
or heirs. Any citizen of the state having knowledge of property 
liable to such tax, against which no proceeding for enforcing col¬ 
lection thereof is pending, may report the same to the clerk and 
it shall be the duty of such officer to investigate the case, and if 
he has reason to believe the information to be true, he shall forth¬ 
with enter the estate and report the same substantially as above 
indicated. For reporting such estates or property the clerk shall 
receive a compensation of one dollar ($1.00) for each one hun¬ 
dred dollars ($100.00) or fraction thereof of tax paid, but not to 
exceed the sum of five dollars ($5.00) in any one estate, the same 
to be in addition to the compensation now allowed him by law. 
Except when this information has first been received from an¬ 
other source, the treasurer of state, when he has issued his receipt 
for the tax in such estate, shall certify to the auditor of state the 
amount due the clerk for such service and the auditor of state 
shall issue his warrant on the treasurer of state in favor of said 
clerk for the sum due as herein provided. 

Treasurer of State to Keep Record of Estates. —Sec. 1481-a46, 
Supplement, 1913. The treasurer of state shall record in a book 
kept in his office for that purpose, all estates reported to him as 
liable for a tax under the provisions of this act, showing,— 

1. The name of the decedent. 

2. The place of his residence or county from which such estate 
was reported. 

3. The date of his death. 

4. The name of the administrator, executor or trustee. 

5. The appraised value of the property, or the value of any 
taxable pecuniary legacy. 

6. The amount of indebtedness that was deducted before esti¬ 
mating the tax. 

7. The amount of tax collected. 

8. The amount of fees paid for reporting and collecting such 
tax. 

9. The amount of tax, if any, refunded. 

He shall also keep a separate record of any deferred estate 
upon which the tax due is not paid within eighteen (18) months 


60 


COLLATERAL INHERITANCE TAX LAW 


from the death of the decedent, showing substantially the same 
facts as is required in other cases, and also showing,— 

a. The date and amount of all bonds given to secure the pay¬ 
ment of the tax with a list of the sureties thereon. 

b. The name of the person beneficially entitled to such estate 
or interest, with place of residence. 

c. A description of the property or a statement of conditions 
upon which such deferred estate is based or limited. 

Appraisers—Appointment of—Term of Office—Vacancies—Removal 
of—After an inventory of property subject to the collateral inheritance 
tax is filed with the clerk, steps should be taken to have a valuation 
made of the property in order to determine the amount of the tax to be 
paid. The statute provides for the appointment of three appraisers who 
are charged with the duty of faithfully and impartially estimating the 
value of the property. The section of the statute is as follows: 

Sec. 1481-a4, Supplement, 1913. In each county, the court shall 
annually at the first term of the court therein appoint three com¬ 
petent residents and freeholders of said county, to act as ap¬ 
praisers of all property within its jurisdiction which is charged 
or sought to be charged with the collateral inheritance tax. 
Said appraisers shall serve for one year, and until their successors 
are appointed and qualified. They shall each take an oath to 
faithfully and impartially perform the duties of the office, but 
shall not be required to give bond. They shall be subject to re¬ 
moval at any time at the discretion of the court, and the court or 
judge thereof in vacation, may also in its discretion, either be¬ 
fore or after the appointment of the regular appraisers, appoint 
other appraisers to act in any given case. Vacancies occurring 
otherwise than by expiration of term, shall be filled by the ap¬ 
pointment of the court or by a judge in vacation. No person in¬ 
terested in any manner in the estate to be appraised may serve 
as an appraiser of such estate. 

Issuance of Commission to the Appraisers—Before the appraisers 
may proceed to place an estimate upon the value of the property in the 
inventory, it is necessary that a commission be issued to them by the 
clerk of the district court directing and authorizing them to act. With¬ 
out such a commission they have no authority to place an estimate upon 
the value of the property regardless of the fact that they may be duly ap¬ 
pointed by the district court to act as appraisers for that county. The 
statute provides: 

Sec. 1481-a5, Supplement, 1913. Whenever it appears that an 
estate or any property or interest therein is or may be subject 
to the tax imposed by this act, the clerk shall issue a commission 


ASSESSMENT AND COLLECTION 


61 


to the appraisers, who shall fix a time and place for appraisement, 
except that if the only interest that is subject to such tax is a 
remainder or deferred interest upon which the tax is not payable 
until the determination of a prior estate or interest for life or 
term of years, he shall not issue such commission until the de¬ 
termination of such prior estate, except at the request of parties 
in interest who desire to remove the lien thereon. 

The commission issued to the appraisers should be in substantially the 
form set forth on page 71 hereof. It is usually combined with the Ap¬ 
praisement Bill. The Appraisement Bill should contain a certified list 
of the assets of the estate to be appraised. If only specific property is 
bequeathed to collateral heirs, and the rest of the estate goes to persons 
exempt from the tax, all the appraisers need to consider is the specific 
bequests subject to the tax. The appraisal of property passing to persons 
exempt from the tax serves no useful purpose whatsoever. 

Wliat the Appraisers Must do After Receiving. Commission to Ap¬ 
praise—Notice of the Time and Place of Appraisement—After receiving 
the commission to appraise the appraisers must prepare a Notice of the 
Time and Place of Appraisement and see that the Treasurer of State and 
all others known to have an interest in the estate are served with this 
notice. All the necessary forms are set forth in this compilation. The 
statute states the duties of the appraisers as follows: 

Duty of Appraisers—Service of Notice—Return of Service— 
Notice of Appraisement —Sec. 1481-a6, Supplement, 1913. It 
shall be the duty of all appraisers appointed under the provisions 
of this act, upon receiving a commission as herein provided, to 
forthwith give notice to the treasurer of state and other persons 
known to be interested in the property to be appraised, of the 
time and place at which they will appraise such property, which 
tinie shall not be less than ten days from the date of such notice. 
The notice shall be served in the same manner as is prescribed 
for the commencement of civil actions, and if not practicable to 
serve the notice provided for by statute, they shall apply to the 
court or a judge thereof in vacation for an order as to notice and 
upon service of such notice and the making of such appraise¬ 
ment, the said notice, return thereon and appraisement shall be 
filed with the clerk, and a copy of such appraisement shall at 
once be filed by the clerk with the treasurer of state. When 
property is located in more than one county, the appraisers of 
the county in which the estate is being administered may ap¬ 
praise the whole estate, or those of the several counties may 
serve for the property within their respective counties or other 
appraisers be appointed as the district court if in session, or judge 
thereof in vacation may direct. 


62 


COLLATERAL INHERITANCE TAX LAW 


Service of the Notice of Time and Place of Appraisement Absolutely 
Necessary—If the Treasurer of State is not notified of appraisement 
proceedings he may thereafter file application to set the appraisement aside 
and ask that another one be made. In Re Estate of McGhee v. State, (1898) 
105 Iowa 9; 74 NW. 695. 

If an heir is not served with this notice he would be entitled to have 
the appraisement proceedings set aside just the same as the state has. 
It is therefore absolutely necessary that this notice be served upon all 
known to have an interest in the estate. County attorneys, clerks, ap¬ 
praisers and all others seeking to enforce the collection of this tax should 
bear this in mind and see to it that proper notice is given and a return 
of service not only made but also filed in the office of the clerk. All the 
necessary forms for effectually carrying out the provisions of this section 
are given in this compilation, see page 65 hereof. 

Every officer or person charged with the duty of collecting inheritance 
tax should remember that if there are minors, insane or incompetent 
heirs that the ordinary Notice of the Time and Place of Appraisement 
will not confer jurisdiction upon the appraisers to proceed with the ap¬ 
praisement. In such cases guardians must be appointed to object to the 
appraisement for those legally incompetent. Great care should be ex¬ 
ercised in such cases in obtaining service of the Notice. Consult the 
county attorney, or the attorney representing the Treasurer of State in 
all such matters and abide by his advice. 

In General—As to Appraisers—As to Value—As previously noted, 
the purpose of having appraisers is to ascertain the value of the property 
in order to determine the amount of tax to be paid upon succession to the 
property- In case the legacy is in the form of a definite sum of money, 
there is no need of the appraisers taking any action. See further upon 
this question section 1481-a9, Supplement, 1913, set forth at page 76 
hereof. 

The statute provides, “no person interested in any manner in the estate 
to be appraised may serve as an appraiser of such an estate.” In an 
early case in this state (1874), our supreme court announced the doctrine 
that in the absence of anything to manifest a contrary intention that it 
must be presumed that whenever provision is made for appraisers that 
such persons are to be “disinterested”, “impartial’', or “indifferent”. 
Pool v. Hennessy, (1874) 39 Iowa 192; 18 Am. Rep. 44. The thought be¬ 
ing that one having an interest in any manner in the property would not 
be competent to act as a disinterested appraiser. If any appraiser has 
an interest in an estate, in any nianner, he should notify the court and 
have another appointed in his place. 

To appraise property is to estimate its value. Vincent v. German In¬ 
surance Co., (1903) 120 Iowa 272; 94 NW. 458. By use of the term 
“value,” it has been held, in a case relating to collateral inheritance, 
when taken into consideration with the term, “appraised value,” “actual 
market value”, and the word “value” without any qualification that it 
was intended to mean the fair market value. Our court has stated, 
“There is nothing in any part of the act to indicate that the general as¬ 
sembly intended to have the value of the property, as fixed by assessors 


ASSESSMENT AND COLLECTION 


63 


and equalizing boards, considered for any purpose. The appraisement is 
to be made by appraisers, and is subject to the approval of the court. 
When the word “value’’’ is applied to property, and no qualification is 
expressed or implied, it means the price which the property will com¬ 
mand in the market. 28 Am. & Eng. Enc. Law, 46.” Re Estate of Mc¬ 
Ghee, (1898) 105 Iowa 9; 74 NW. 695. 

NEW YORK. 

An appraiser is an officer of court and in some respects acts in a 
judicial capacity as well as ministerial. In New York he is held to have 
power to issue subpoenas and compel witnesses to appear for examina¬ 
tion, and rule on the admission of testimony presented before him. See 
Gleason and Otis on “Inheritance Taxation,” page 380. 

If it is necessary to take the deposition of a non-resident to ascertain 
whether the succession to certain property is subject to the tax, a surro¬ 
gate’s court has authority to issue the commission to take the testimony 
of such non-resident witness. Re Wallace, 71 App. Div. 284. Further, 
if a witness refuses to answer a material question as to facts relative to 
an estate, or as to circumstances of the gift made by testator during his 
life time, such witness may be punished for contempt. Matter of Kennedy, 
113 App. Div. 4. 

Procedure When the Value of the Assets of an Estate is Doubtful— 
There are no cases upon this subject in Iowa. However the usual rule is 
to apply for additional time in which to file an inventory of such assets 
and thus the appraisement is delayed. The wisdom of such procedure is 
illustrated in the citation from New York. 

Where the assets of an estate consist of rights or property, the value 
of which is not easily ascertained, such as patents, copyrights, etc., the 
Treasurer of State should be consulted before appraisement. In such 
cases it would probably be to the best interest of all concerned for the 
appraisers to consult experts in fixing the value of the property. 

NEW YORK. 

If the value of part of the assets of an estate cannot be determined 
at the time of the regular appraisement, such assets should be excluded 
from the valuation and reserved for future appraisement. It was so held 
in the Matter of W T estum, (1897) 152 N. Y. 93, where it was shown that 
the administrator had brought action to collect a note and that the debtor 
claimed payment had been previously made, and the matter was thus 
pending at the time of the regular appraisement. 

Procedure—When the Property to be Appraised is Subject to a 
Mortgage—This question has never been passed upon by our supreme 
court, but the Treasurer of State follows the general rule as recognized 
in Massachusetts and New York when the property is appraised at its 
actual value, less the encumbrance upon it. Or in other words, it is 
the equity which the decedent possessed in the property that is to be 
appraised and the tax is to be computed upon the value of this equity, 
rather than upon the value of the property itself. 


64 COLLATERAL INHERITANCE TAX LAW 

See page 51 hereof for citations from Massachusetts and New York. 

“Good Will”—When it Should be Considered as an Asset in Making 
Appraisement—“Good will” has been frequently defined as “the ad¬ 
vantage or benefit which is acquired by an establishment, beyond the 
mere value of the capital stock, funds, or property employed therein, in 
consequence of the general public patronage and encouragement, which it 
receives from constant or habitual customers on account of its local 
position or common celebrity.” Millspaugh Laundry Co. v. Sioux City 
National Bank, (1903) 120 Iowa 1; 94 NW. 262; 20 Cyc. 1275. More 
briefly stated it is the favor which the management of a business wins 
from the public by years of hard work and fair business dealing, and the 
presumption that old patrons will continue to deal at the same place 
although under new management. As a rule “good will” is not to be con¬ 
sidered of value except when taken in connection with tangible property. 
A dealer in merchandise may have acquired the “good will” of the public 
through his fair dealings and there attaches to his place of business and 
to his name this intangible asset termed “good will”. Its value is to be 
determined according to the circumstances of each case and should be 
considered by appraisers in fixing the value of property for the purpose 
of arriving at the collateral inheritance tax. 

“Good will” is not to be considered in appraising the value of a com¬ 
pany, such as a gas plant where it is the only concern of its kind in the 
vicinity and hence has a monopoly on the business. Des Moines Gas Co. 
v. Des Moines, 199 Fed. 204; Cedar Rapids Gaslight Co. v. City of Cedar 
Rapids, (1909) 144 Iowa 426; 120 NW. 966; 48 L. R. A. (ns) 1025; Willcox 
v. Consolidated Gas Co., 212 U. S. 19; 53 L. Ed. 382; 29 Sup. Ct. Rep. 
192; 48 L. R A (ns) 1134. 

NEW YORK. 

The “good-will” of a business is held taxable in this state. In the 
Matter of Dun, 40 Misc. Rep. 509; 82 N. Y. Sup. 802, an appraisement of 
the “good-will of the business of the firm of R. G. Dun & Company” at 
the sum of $2,000,000.00 was sustained. 

In estimating the value of good will the courts of New York have 
followed an interesting method which is well illustrated in the Matter 
of Keahon, 60 Misc. 508, 113 N. Y. Sup. 926, when it was shown that the 
decedent had been in business for fifteen years. At the time of his death 
the net capital of his business was approximately $30,700.00 and his an¬ 
nual profits were $26,679.00. The court multiplied the net profits by three 
in estimating the value of the “good will” of the business. 

In another case the value of the “good will” of a confectionery business 
was held to be six times the annual profits. Van Au v. Magerheimer, 
126 Misc. 257-270. 

The approved rule in New York is usually to appraise the “good will” 
of a business from three to five times the annual profits, according to the 
length of time the decedent conducted his business. 

PROCEDURE 

Form of Notice of Appraisement—Notice by Publication, etc.—The 
preceding section of the statute provides for the service of the Notice 


ASSESSMENT AND COLLECTION 


65 


of the Time and Place of Appraisement upon the Treasurer of State and 
upon all others known to have an interest in the estate. There are a 
number of methods of serving this notice, several of which are set forth 
in this compilation. So far as the Treasurer of State is concerned, he 
stands ready and willing to acknowledge or accept service of such a 
notice. By so doing ‘the estate may avoid the expense of obtaining per¬ 
sonal service. The Treasurer of State recommends that this method be 
exclusively used in notifying him of appraisement proceedings. The 
Treasurer should be given this sort of notice even when it is necessary 
Jo obtain service by publication on others known to be interested in the 
estate. 

The notice may be in substantially the following form: 

Form No. 2. 

NOTICE OF THE TIME AND PLACE OF APPRAISEMENT. 

IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 

.COUNTY. 

Probate No. 

Notice of the Time and Place of 
Appraisement. 

To E. H. Hoyt, Treasurer of the State of Iowa, and to .. 

(name all persons known to have an interest in the estate such as heirs, 
legatees, charitable corporations, etc.). 

You and each of you are hereby notified that the undersigned, the 
duly appointed and qualified appraisers for said county of property 
charged or sought to be charged with the payment of a Collateral In¬ 
heritance Tax, will at . o’clock.M., on the . day of 

.. 19...., at. (name the place) ... 

in the County of .. State of Iowa, proceed to appraise 

the real and personal property of the Estate of the said decedent sub¬ 
ject to the Collateral Inheritance Tax in the form and manner pro¬ 
vided by law 1 . 

You are further notified that you may appear at said time and place 
and be heard as to the appraisement of said property or any portion 
thereof. 

Therefore take notice of this proceeding and govern yourselves ac¬ 
cordingly. 

Dated this . day of.. 19. 


In the Matter of 
the Estate of 


deceased. 


6 


Appraisers. 


















66 


COLLATERAL INHERITANCE TAX LAW 


It is necessary that the appraisers show the court how they served 
the notice, or caused it to be served. This showing is usually called a 
“return of service.” When the notice has been served by the sheriff 
upon the person himself, the following form may be used: 

Form No. 3. 

RETURN OF PERSONAL SERVICE. 


State of Iowa, 

. County. 

I, ., sheriff of.county, 

State of Iowa, hereby certify that I received the within (or annexed) 
Notice of the Time and Place of Appraisement for service on the. 

day of ., 19_, and that on the . day of 

.. 19., at .Township, in 

said county, I served the same personally on. 

(name person)—by reading said Notice to him (or offering to read it to 
him, he refusing to hear it read) and by delivering to him personally 
a true copy of said notice (or offering to deliver to him a true copy 
of said notice, he refusing to receive the same). 

Dated this . day of .. 19. 



Sheriff of said County. 

Fees $. 

By . 

Deputy Sheriff of said County. 

If the notice is served by any person other than the sheriff or his 
deputy, the return of service must be made under oath. The following 
may be used as a guide in such a case: 

Form No. 4. 

RETURN OF PERSONAL SERVICE. 

State of Iowa, 

. County. 

I,.. being first duly sworn depose and say 

that I received the within (or annexed) Notice of the Time and Place 

of Appraisement for service on the . day of .. 

19. (proceed from here as in foregoing form except as to signature). 



(Signature) 

Subscribed and sworn to by.before 

me this . day of ., 19. 

Notary Public in and for 
said County. 


(Seal) 


























ASSESSMENT AND COLLECTION 


67 


Many times all those named in the notice are willing to accept serv¬ 
ice and thus save the cost of having a sheriff serve them. The Treas¬ 
urer of State should be served in this manner as he is always willing 
to accept service. In event the service is accepted it should be in sub¬ 
stantially the following form: 


Form No. 5. 

ACKNOWLEDGMENT OF SERVICE. 

State of Iowa. 

. County. 

As one of the persons named in the foregoing Notice of the Time and 
Place of Appraisement, I hereby acknowledge due and legal service or 

the said Notice at . Township. 

County, Iowa, on this . day of .. 19. 



(Signature) 

It sometimes happens that it is difficult, or impossible, to obtain per¬ 
sonal service upon one or more of the persons named in the Notice yet 
it is possible to get service upon some member of his, or her, family 
over fourteen years of age. Service upon such a person may be made 
and when made is just as effective in the eyes of the law as personal 
service upon the real party in interest. The return in such cases should 
be substantially as follows: 


Form No. 6. 

RETURN FOR SUBSTITUTED SERVICE. 

State of Iowa, 

. County. 

I, .. sheriff of. county. 

State of Iowa, hereby certify that I received the within (or annexed) 

Notice of the Time and Place of Appraisement for service on the. 

day of ...... 19__ and that I served the same on 

the . day of ...,19.upon . 

(name the real party in interest) by leaving a copy thereof at the dwell¬ 
ing house of the said. (name the real party in 

interest) . in .Township, 

in the county aforesaid, that being his usual place of residence, with 

. (name the person to whom you delivered the 

copy) .the son (or wife, or daughter as the facts may be) of the 

said. (name the real party in interest). 

























' 68 


COLLATERAL INHERITANCE TAX LAW 


he (or she) being a member of said.(name the real 

party in interest).family, over fourteen years 

of age; the said.(name the real party in interest) 

.not being found in said county. 

Dated this. day of .,19. 


No. 4. 


Sheriff of said County. 


By . 

Deputy Sheriff of said County. 

In event the person who serves the notice is not the sheriff, or his 
deputy, the return should be made under oath as set forth in Form 
No. 4. 

Then again it frequently happens that the heirs or legatees are domi¬ 
ciled in a foreign country or cannot be located within the State and it is 
thus impossible to obtain personal service of the Notice of the Time and 
Place of Appraisement upon them. In such a case it is necessary to 
obtain service by “publication,” that is, publish the notice once each 
week for four consecutive weeks in some newspaper of general circula¬ 
tion within the county. In event it is necessary to do so an application 
must be made to the court stating the facts and asking for authority 
to obtain service by publication. The application should be in sub¬ 
stantially the following form: 


Form No. 7. 

APPLICATION FOR ORDER TO SERVE NOTICE OF APPRAISE¬ 
MENT BY PUBLICATION. 

IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 

. COUNTY. 

In the Matter of ) Probate No. * 

the Estate of f Application for Order to Serve 

. f Notice of Appraisement by 

deceased. ) Publication. 

Comes now the undersigned, the duly appointed and qualified ap¬ 
praisers of property charged or sought to be charged with the payment 
of the Collateral Inheritance Tax, and to the court states: 

That the beneficiaries of the Estate of.. 

deceased, all reside in the City of Paris, France, (or state the facts as 
they exist;. 

That it is not practical to obtain personal service of the Notice of 
the Time and Place of Appraisement upon said beneficiaries as pro¬ 
vided for by statute, and, 

Therefore these appraisers respectfully ask that an order be entered 
authorizing Uese appraisers to serve the Notice of the Time and Place 
of Appraisement upon the said beneficiaries by publication, and that the 















ASSESSMENT AND COLLECTION 


69 


aforesaid Notice be published in the. 

(name the newspaper). for the time and in the manner 

required by law in such cases. 

Dated this . day of .19. 


Subscribed and sworn to by. 

and.before me this 

19. 


Appraisers. 


day of 


Notary Public in and for 
. County, Iowa. 

(Seal) 

If the court, after inspection of the application, finds the facts suf¬ 
ficient to warrant service of the notice by publication, he may enter an 
order in substantially the following form thereby authorizing the pub¬ 
lication of the notice. 

Form No. 8. 

ORDER FOR SERVICE OF NOTICE OF APPRAISEMENT BY 

PUBLICATION. 

IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 
. COUNTY. 


In the Matter of ) Probate No. 

the Estate of f 

. r Order for the Service of Notice of 

deceased. ) Appraisement by Publication. 

BE IT REMEMBERED that on this . day of .. 

19...., comes on for hearing the application of the Collateral Inheritance 

Tax appraisers in the Matter of the Estate of.. 

deceased asking for authority to serve Notice of the Time and Place 
of Appraisement by publication. 

The court being fully advised, in the premises finds that the said ap¬ 
plication should be granted as prayed for. 

IT IS THEREFORE ordered and decreed that the Notice of the Time 
and Place of Appraisement of the property of said Estate be made by 

publication in the.•. (name the newspaper) 

. published at. (name the place) 

.in said county and State, once each week for four 

consecutive weeks. 


Judge. 




























70 


COLLATERAL INHERITANCE TAX LAW 


After the granting of this order the appraisers should proceed to pub¬ 
lish the Notice of the Time and Place of Appraisement as directed in 
the order of the court. The Notice should be substantially the same as 
Form No. 2, page 65 hereof. 

It is just as necessary that a return of service he made when the 
notice is served by publication as when it is served in any other manner. 
But the method of making the return is entirely different. In such cases 
it is made by the publisher of the newspaper or his foreman. It should 
be in substantially the following form: 

Form No. 9. 

AFFIDAVIT OF PUBLICATION OF NOTICE OF APPRAISEMENT. 

IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 

. COUNTY. 

In the Matter of ) Probate No. 

the Estate of ( 

.. f Affidavit of Publication of Notice 

deceased. J of Appraisement. 

State of Iowa, l ss. 

. County, j 

I, .. being first duly sworn depose and say that I 

am the publisher (or foreman) of the.(name the 

paper) ., a weekly (or semi-weekly or daily) newspaper, 

printed at.(name the place).. 

in . county, Iowa, and that the annexed printed 

Notice of the Time and Place of Appraisement in the Matter of said 
Estate was published in said newspaper for four consecutive weeks; the 

date of the first publication being on the.day of., 

19-- and the last publication being on the.day of.. 

19. 


(Signature) 

Fees $. 

Subscribed and sworn to by.. 

before me this.day of . t 19 ... 


Notary Public in and for 

(Seal) said County. 

It sometimes happens that some of the heirs are unknown and hence 
there is no way of obtaining service except by publication. In such a 
case application should be made to the court in the same manner as 
set forth in event some of the heirs are in a foreign land. The procedure 
will be the same in every respect except that the notice would of neces¬ 
sity be addressed as follows: 























ASSESSMENT AND COLLECTION 


71 


Form No. 10. 

NOTICE OF THE TIME AND PLACE OF APPRAISEMENT. 
(Unknown Claimants) 

In the Matter of ) Probate No. 

the Estate of ( 

. C Notice of the Time and Place of 

deceased. ) Appraisement. 

To E. H. Hoyt, Treasurer of the State of Iowa, and to each and all of 

the Unknown Claimants of the property of. 

deceased, more particularly described as consisting of (describe the per¬ 
sonal property in a general way, but in case of real property give the 
official description) (Now proceed as in the usual notice, see Form No. 
2, on page 65). 

In case an heir is insane, or an inmate of an asylum, or a minor, the 
ordinary notice of appraisement will not be sufficient to confer juris¬ 
diction upon the appraisers or court to proceed with the appraisement. 
The regular guardian of such person, or the guardian ad litem, must 
appear and defend for such incompetent or minor. In such cases the 
appraisers should consult the county attorney, or the attorney repre¬ 
senting the Treasurer of State, and follow his directions. 

When the appraisers have served the Notice of the Time and Place of 
Appraisement upon the Treasurer of State and upon all others known 
to have an interest in the estate, and have a return of service showing 
that notice has been given to each and every person known to be inter¬ 
ested in the estate, the appraisers may then proceed to place an estimate 
upon the value of the property of the estate at the time and place stated 
in the notice. 

The clerk of the district court should furnish the appraisers with a 
certified statement of all the assets of the estate inventoried by the 
executor, or administrator, and it/ is upon this list of property that the 
appraisers place their estimates of value. The Commission to Apprais¬ 
ers and the certified statement usually are printed upon one form which 
is called the Commission to Appraisers and the Appraisement Bril. It 
should be substantially as follows: 

Form No. 11. 

COMMISSION TO APPRAISERS. APPRAISEMENT BILL. 

(Collateral Inheritance Taxation) 

JN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 
.’.COUNTY. 

In the Matter of the Estate of ) 

/■ Probate No. 

Deceased. ' 

COMMISSION TO APPRAISERS. 

STATE OF IOWA, 

..COUNTY. 










72 


COLLATERAL INHERITANCE TAX LAW 


To.. . and 

.. you, the appraisers of property charged 

or sought to be charged with the payment of a Collateral Inheritance 

Tax, are hereby commissioned to appraise the property of . 

. deceased, late of ..county and State 

of.which is subject to the aforesaid tax. You will, 

therefore, after having given not less than ten days’ Notice of the Time 
and Place of Appraisement to the Treasurer of State and to all others 
knows to have an interest therein, as required by law, then proceed to 
make an appraisement of the property set out in the following inventory, 
and file with this court the said Notice with your return of service there¬ 
on, and your Appraisement Bill of said property, on or before the. 

day of .19... 

Witness my hand and official seal hereto affixed at. 

this .day of.A. D. 19... 


Clerk of said District Court. 
INVENTORY AND APPRAISEMENT BILL. 


REAL PROPERTY. 


DESCRIPTION 
(See Instruction No. 1 

Sec. 

Twp. 

Rng. 

Lot 

Block 

Acres 

Appraised Value 
(See Instruction No. 2) 






















Total Appraised Value of Real Property 


PERSONAL PROPERTY 


* DESCRIPTION 
(See Instruction 1) 

Appraised Value 
(See Instruction 2) 

DESCRIPTION 
(See instruction 1) 

Appraised Value 
(See Instruction 2) 









Amt. Carried Forward 








Total Appraised Value of Personal Property 




NOTES AND ACCOUNTS 


By Whom Owing 

Date of 

Note or 
Acct. 

Rate 

of 

Int. 

Face of Note or 
Account 

Interest on to 
Date of Death 

Appraised Value 
(See Instruction 1) 








wn^ ’ ' ' 









• 



Total Appraised Value of Notes and Accounts 


Grand Total Appraised Value of Entire Estate 





















































































ASSESSMENT AND COLLECTION 


73 


TO THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 

.COUNTY. 

We, the undersigned, being first duly sworn, depose and say that we 
are the duly appointed appraisers in the county and state aforesaid, of 
property charged or sought to be charged with the payment of the Col¬ 
lateral Inheritance Tax, and that we have faithfully and impartially, and 
without prejudice appraised the property set out in the foregoing inven¬ 
tory at what we believe to be its fair market value, as indicated in the 
column marked “Appraised Value.” 

Dated this.day of.. 19... 

1. No. days service. 1. 

2. No. days service. 2. 

3. No. days service. 3. 

Appraisers. 

Subscribed and sworn to by the above named appraisers before me 
this .day of.. 19... 


Clerk of said District Court. 

CERTIFICATE TO TREASURER OF STATE. 

(See Instruction 4.) 


STATE OF IOWA, V ss.: 

.COUNTY. ) 

I, .. Clerk of the District Court in and for 


said County, do hereby certify that the within instrument is a true and 
complete copy of the appraisement made by the inheritance tax apprais¬ 
ers in the Estate of ... 

Dated this.day of.. 19.. 


Clerk of said District Court. 

INSTRUCTIONS. 

Instruction 1. 

In the column designated “Description,” in addition to the legal 
description, state the nature of the estate passing, for instance, “undi¬ 
vided one-half,” “life estate,” for “term of ten years,” “remainder after 
life estate,” or “in fee” as the case may be. 

Instruction 2. 

If the estate passing is less than in fee, as for instance, “life estate,” 
etc., the appraisers should estimate the fair market value of the prop¬ 
erty just as if it had passed in fee. Do. not attempt to appraise the 
value of the life estate, nor should you consider the fact that the es- 




















74 


COLLATERAL INHERITANCE TAX LAW 


tate is less than in fee. After getting your estimate of the value of 
the property, the Treasurer of State estimates the value of the life 
estate by the use of the mortality tables. 

Instruction 3. 

If no objection is made to this report within twenty days after it is 
filed with the clerk, it shall stand as approved. 

Instruction 4. 

The Clerk of the District Court should forward a certified copy of 
this report to the Treasurer of State immediately after the original 
comes into his hands. 

Time When Real Property Must be Appraised — Default in 
Payment of Tax. —Sec. 1469 of the Code. All the real estate of 
the decedent subject to such tax shall, except as hereinafter pro¬ 
vided, be appraised within thirty days next after the appoint¬ 
ment of an executor, administrator or trustee, and the tax 
thereon, calculated upon the appraised value after deducting 
debts for which the estate is liable, shall'be paid by the person 
entitled to said estate within fifteen months from the approval 
by the court of such appraisement, unless a longer period is fixed 
by the court, and, in default thereof, the court shall order the 
same, or so much thereof as may be necessary to pay such tax, 
to be sold. 

See also the following section wherein provision is made for the ap¬ 
praising of the property in case the executor or administrator fails to 
have the property appraised. The following provision was passed after 
the section of the Code above set forth and in case of a conflict the former 
should prevail. Edgar v. Greer, (1859) 8 Iowa 393a. 

Time of Appraisement of Transferred Property 1 —Appraised 
Value to be Market Value—Deduction of Debts. —Sec. 1481-a8, 
Supplement, 1913. Within ninety (90) days after the transfer 
of any property that may be liable for a tax under the provisions 
of this act, except as hereinotherwise provided, the clerk of the 
proper county upon his own motion or upon the application of 
the treasurer of state, county attorney, or person interested in 
the property, shall cause the property to be appraised as provided 
herein. If there be an estate or property subject to said tax 
wherein the records in the clerk’s office do not disclose that 
there may be a tax due under the provisions of this act, the per¬ 
son or persons interested in the property shall report the matter 
to the clerk with an application that the property be appraised. 
The appraised value of the property shall in all cases be its mar¬ 
ket value in the ordinary course of trade, and in domestic estates 


ASSESSMENT AND COLLECTION 


75 


the tax shall be calculated thereon after deducting the debts as 
defined herein; provided, however, that the debt of a domestic 
estate owing for or secured by property outside of the state, 
shall not be deducted before estimating the tax, except when the 
property for which the debt is owing or by which it is secured is 
subject to the tax imposed by this act, or when the foreign debt 
exceeds the value of the property securing it or for which it was 
contracted, then the excess may be deducted provided that satis¬ 
factory proof of the value of the foreign property and the amount 
of such debt is furnished to the treasurer of state. 

See the preceding section of the Code and the notation thereunder. 

When Personal Property Cannot Be Ascertained.—Time of 
Appraisement Extended. —Sec. 1481-a27, Supplement, 1913. When¬ 
ever, b}^ reason of the complicated nature of an estate, or by rea¬ 
son of the confused condition of the decedent’s affairs, it is im¬ 
practicable for the executor, administrator, trustee or beneficiary 
of said estate to file with the clerk of the court a full, complete 
and itemized inventory of the personal assets belonging to the 
estate, within the time required by statute for filing inventories 
of the estates, the court may, upon the application of such repre¬ 
sentatives or parties in interest, extend the time for making the 
collateral inheritance appraisement for a period not to exceed 
three months beyond the time fixed by this act. 

There may be cases in which it is exceedingly difficult to make a 
full or complete list of the personal assets of an estate within the time 
allowed by law. In such cases additional time may be obtained in which 
to file the inventory. It should be remembered, however, that delay in 
filing the inventory, or in making the appraisement does not stop in¬ 
terest on the tax, if the tax is not paid within eighteen months from 
the date of the decedent’s death. 

PROCEDURE. 

In case an administrator desires additional time in which to file his 
inventory, he should make an application to the court in substantially the 
following form: 

Form No. 12. 

APPLICATION FOR EXTENSION OF TIME TO FILE INVENTORY. 

IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 
. COUNTY. 

In the Matter of j Probate No. 

the Estate of ( 

. r Application for Extension of Time to 

deceased.' ” ’ ) File Inventory. 





76 


COLLATERAL INHERITANCE TAX LAW 


Comes now.. Administrator (or Executor) 

of the Estate of., deceased and to the court 

states: 


That the assets of said estate consist of numerous notes, bonds and 
book accounts and the complicated nature of the said estate is such 
that this administrator cannot at this time file a full, complete, and item¬ 
ized inventory of the personal assets of said estate within the time 
allowed by statute. (If facts be different so state them.) 

Therefore, this administrator prays that an order be granted extend¬ 
ing the time for filing said inventory until the.day of.. 

19. 


(Signature of Administrator.) 

Subscribed and sworn to by.before me this 

_ day of .. 19. 


Notary Public in and for. County. 

The order granting the extension of time may be in substantially the 
following manner: 

Form No. 13. 

ORDER GRANTING EXTENSION OF TIME IN WHICH TO FILE 

INVENTORY. 

IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 

. COUNTY. 

In the Matter of \ Probate No. 

the Estate of ( 

... ( Order Granting Extension of Time in 

deceased. ) Which to File Inventory. 

BE IT REMEMBERED that on this. day of. 

19-- comes on for hearing the application of. 

Administrator (or Executor) of the Estate of. t 

deceased, wherein an extension of time is prayed for in which to file an 
inventory of the personal property of said estate. 

The court being fully advised in the premises finds that said applica¬ 
tion should be granted as prayed for. 

IT IS HEREBY ORDERED AND DECREED that the administrator of 
the above named estate be granted additional time in which to file an 
inventory of the personal property of said estate; that said adminis¬ 
trator shall prepare and have on file the said inventory on or before the 

.day of.19. 


Judge. 

Relief from Appraisement of Personal Property — When 
Granted—Procedure.—Sec. 1481-a9, Supplement, 1913. All es- 
























ASSESSMENT AND COLLECTION 


77 


tates subject in whole or in part to the tax imposed by this 
act shall be appraised for the purpose of computing said tax 
by the regular collateral inheritance tax appraisers; pro¬ 
vided, that estates liable for the payment of the inheritance 
tax upon specific legacies, annuities, bequests of money or 
other property the value of which may be determined without 
appraisement, and estates which consist of money, book accounts, 
bank deposits, notes, mortgages and bonds, need not be appraised 
by the collateral inheritance tax appraisers if the administrator, 
executor or trustee or the persons entitled to or claiming such 
property are willing to charge themselves with the full face value 
of such bequests or property, together with the interest, earn¬ 
ings or undivided profits which may be due on said properties, at 
the time of death of the testator or intestate, as the basis for the 
assessment of said tax, but in all cases the relief from appraise¬ 
ment for the collateral inheritance tax is dependent upon the 
consent of the treasurer of state, and the subsequent approval 
thereof by the court or judge thereof in vacation. In the event 
that the estate has been duly appraised ' under the ordinary 
statutes of inheritance or the property has been sold and such 
appraisement or selling price is accepted by the treasurer of 
state as satisfactory for collateral inheritance tax purposes, the 
court or judge thereof in Vacation may, upon proper application, 
relieve the estate from the appraisement by the collateral in¬ 
heritance tax appraisers; but in order to obtain such relief, the 
administrator, executor, trustee or other party interested must 
file an application for relief with the consent of the treasurer of 
state thereto in the office of the clerk of the court before said 
clerk issues a commission to the collateral inheritance tax ap¬ 
praisers. The court or judge thereof in vacation may, upon ap¬ 
plication of the representatives of the estate or parties inter¬ 
ested, relieve the estate of the appraisement for collateral in¬ 
heritance tax purposes if it be shown to said court that the mar¬ 
ket value of the entire estate will not exceed one thousand dollars; 
provided, that prior to the application to said court or judge the 
written consent of the treasurer of state to such relief is procured.. 
In all cases where an estate is relieved from an appraisement for 
collateral inheritance tax purposes, the order granting relief 
shall be recorded in the clerk’s office, and the fact of such relief 
and reasons therefor shall be duly noted in the decree or order 
of final settlement made by the court. 


78 


COLLATERAL INHERITANCE TAX LAW 


In case a foreign estate desires to be relieved from having its property 
appraised in the State of Iowa a different form of procedure should be 
followed. See page 95 hereof. It should be remembered that real prop¬ 
erty must always be appraised regardless of whether the estate is a 
domestic estate or a foreign one; the Treasurer makes no exceptions to 
this rule. 

PROCEDURE. 

It frequently happens that the personal property is of such a char* 
acter that its value may be ascertained without the aid of appraisers. 
In such a case the administrator, or executor, may make application to 
be relieved of the necessity of having an appraisement made. This ap¬ 
plication should be as follows: 

Form No. 14. 

APPLICATION FOR RELIEF FROM APPRAISEMENT. 

To the Treasurer of State, Des Moines, Iowa: 

The Estate of .. late of .... 

County.for which I act as. is sub¬ 

ject to the tax imposed upon Collateral Inheritances by the State of Iowa. 

I respectfully ask your consent to the relief of this estate from the 
regular appraisement in the assessment of said tax, for the reasons that, 


Total value of described property.$- 

And (name the person) is willing to charge ..self with the full face 
of such bequest or property, together with the interest, earnings, or un¬ 
divided profits which was due on said property, at the time of death of 
the testator or intestate, as the basis for assessment of said tax. 


Administrator 
Executor 
Trustee 

STATE OF IOWA, 

.COUNTY. 

.., being duly sworn, upon my oath do de¬ 
clare the foregoing statements to be true, the same to be in my best judg¬ 
ment sufficient to warrant the relief of the estate aforesaid from appraise¬ 
ment. 


Subscribed and sworn to before me, and in my presence by said 
. on this.day of. 19 .. 



Notary Public in and for.County. 

., Clerk of the Court of . 

County, Iowa, do hereby certify that the foregoing statements of.... 

. of the estate of 

shown by the records of my office. . 


are correct as 

























ASSESSMENT AND COLLECTION 


79 


Witness my hand and seal this.day of.19... 


Clerk of Court. 

To the Treasurer of State, Des Moines, Iowa: 

I have personally examined into the condition of the estate of. 

. late of. County, and it is my opinion 

that the foregoing statements of the.are correct and 

the reasons given sufficient to warrant your consent to the relief of the 
estate from the appraisement required for the assessment of the collateral 
inheritance tax. 


County Attorney. 

TREASURER OF ST ATE’S CONSENT TO RELIEF FROM APPRAISE¬ 
MENT. 

IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 
.COUNTY. 


In the Matter of the Estate ) 

of. [■ ss.: 

Deceased.) 

To the District Court of said County: 

The estate of . . ..., late of.county 

now in the course of administration in probate in your court passes in 
some part to collateral beneficiaries and is therefore subject to the pro¬ 
visions of law imposing a tax upon collateral inheritances or transfers. 

From the sworn statement of the.of said estate as 

hereinafter found and made a part hereof, it appears that the liability 
of the estate of the decedent aforesaid for the collateral inheritance tax 
and the exact amount of said tax can be determined without resort to 
the regular proceedings for the appraisement of the property comprising 
the estate, and being advised that the collateral inheritance tax can be 
fully determined without an appraisement without detriment to the 
state’s interest. 

Therefore, I, .. Treasurer of the State of Iowa„ 

do hereby consent to the relief of the estate of the decedent aforesaid 
from the regular appraisement required under the provisions of the stat¬ 
utes assessing the collateral inheritance tax. 

Signed this.day of.19.., at Des Moines, Iowa. 


Treasurer of State. 


By 


Deputy. 




















80 


COLLATERAL INHERITANCE TAX LAW 


ORDER OF THE COURT GRANTING RELIEF. 

IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 
.COUNTY. 

Now on this.day of.19.., the within ap¬ 

plication coming on for hearing and it appearing from the statements 
contained in the said application that the inheritance tax can he deter¬ 
mined without resort to an appraisement of the property of the aforesaid 
estate, it is hereby orderd that, for the reasons stated in the within ap¬ 
plication, the estate of.be, and the same is hereby 

relieved from appraisement as required by law for assessment of an in¬ 
heritance tax. 


Judge of the.Judicial District. 

INSTRUCTIONS. 

No. 1. Make this application in duplicate and mail both copies to 
the Treasurer of State, Des Moines, Iowa. 

No. 2. If relief from an appraisement is made, it answers the purpose 
of an appraisement of the property. In making the application be sure 
to state fully your reasons justifying the relief asked for. A list of the 
property and its value must be given. If part of the property of the 
estate has been specifically bequeathed to persons exempt from the im¬ 
position of the collateral inheritance tax, do not list such property in this 
application. 

Objections to Appraisement—When Filed—Appraisement Ap¬ 
proved or Set Aside—Appeal. —Sec. 1481-a7, Supplement, 1913. 
The treasurer of state or any person interested in the estate or 
property appraised, may, within twenty (20) days thereafter, file 
objections to said appraisement and give notice thereof as in be¬ 
ginning civil actions, on the hearing of which as an action in 
equity either party may produce evidence competent or material 
to the matters therein involved. If upon such hearing the court 
finds the amount at which the property is appraised is its value 
on the market in the ordinary course of trade, and the appraise¬ 
ment was fairly and in good faith made, it shall approve such 
appraisement; but if it finds that the appraisement was made at 
a greater or less sum than the value of the property in the ordi¬ 
nary course of trade, or that the same was not fairly or in good 
faith made, it shall set aside the appraisement, appoint new ap¬ 
praisers and so proceed until a fair and good appraisement of the 
property is made at its value in the market in the ordinary course 
of trade. The treasurer of state or any one interested in the prop¬ 
erty appraised, may appeal to the supreme court from the order 








ASSESSMENT AND COLLECTION 


81 


of the district court approving or setting aside any appraisement 
to which exceptions have been filed. Notice of appeal shall he 
served within sixty days from the date of the order appealed 
from, and the appeal shall be perfected in the time now provided 
for appeals in equitable actions. In case of appeal the appellant, 
if he is not the treasurer of state, shall give bond to be approved 
by the clerk of the court, which bond shall provide that the said 
appellant and sureties shall pay the tax for which the property 
may be liable with cost of appeal. If upon the hearing of objec¬ 
tions to the appraisement, the court finds that the property is not 
subject to the tax, the court shall upon expiration of time for 
appeal, when no appeal has been taken, order the clerk to enter 
upon the lien book a cancellation of any claim or lien for taxes. 
If at the end of twenty (20) days from the filing of the appraise¬ 
ment with the clerk, no objections are filed, the appraisement 
shall stand approved. 


PROCEDURE. 

The following form has been prepared on the assumption that the 
Treasurer of State is objecting to the appraisement. This form may be 
so modified as to serve as a guide in any other case. Usually such mat¬ 
ters may be heard in the probate court where administration is pending. 

Form No. 15. 

PETITION OBJECTING TO COLLATERAL INHERITANCE 
APPRAISEMENT 


IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 
. COUNTY. 


Term, A. D. 19- 


In the Matter of 
the Estate of 


deceased. 


Probate No. 

Petition Objecting to Collateral 
Inheritance Appraisement. 


Comes now E. H. Hoyt, as Treasurer of the State of Iowa, and objects 
to the collateral inheritance appraisement made in the above entitled 
estate, and as grounds therefor to the court states: 


That the duly appointed appraisers of property charged or sought 
to be charged with the payment of the collateral inheritance tax for said 
county, filed with the clerk of the district court of said county on the 


day of ., 19__ their report wherein it ap¬ 

pears that said appraisers proceeded to appraise the following described 
real property, to wit:—(Describe it). 

5 









82 


COLLATERAL INHERITANCE TAX LAW 


That the appraisers aforesaid appraised the above described property 
as shown by their report, at . dollars per acre, totaling in 


value the sum of . dollars. 

That said property was and is fairly and reasonably worth the sum 
of .dollars per acre on the market in the ordinary 


course of trade; that the total value of said real property is fairly and 
reasonably worth the sum of . dollars. 

That the appraised value of said real property, as fixed by the duly 
appointed appraisers, has net been fairly or in good faith made; that it 
has not been made with any fair regard as to the reasonable value of 
said real property; that to allow said appraisement to stand as a fair 
valuation of said property will permit the beneficiaries thereof to avoid 
the payment of a fair and equitable tax on their right of succession to 
said property; and that the State of Iowa will suffer therefrom. 

Wherefore the petitioner prays that an order be made and entered 
of record setting aside the said appraisement, and that the appraisement 
be held as naught; and that three new and disinterested appraisers be 
appointed to proceed to make a fair and reasonable appraisal of safd 
property as provided by law, to the end that equity and justice may be 
done in the premises; the petitioner further prays for such other and 
further relief as to the court may be deemed equitable, and for the 
costs of this action. 


Attorneys for Treasurer of State. 

(Add usual verification) 

The foregoing section is silent as to the time and place of hearing of 
the petition objecting to the appraisement. However, since it is to the 
interest of all concerned that a speedy disposition be made of such mat¬ 
ters, it is well to have the court fix the time and place of hearing by 
making an order substantially as set forth in Form No. 21, on page 
103 hereof. A reasonable time (at least two weeks) should be given 
all parties in which to prepare for the hearing. 

The notice of the filing of the petition objecting to the appraisement 
should be substantially as an original notice and served in the same 
manner. If the court has, by order, fixed a time and place of hearing, 
then the notice should set forth this fact so that those served with the 
notice may have opportunity to appear and show cause why the petition 
should be denied. 

Sec. 1481-a20, Supplement, 1913, probably grants authority to a court 
to make any order necessary in relation to the assessment, collection, 
and the hearing of matters relating to inheritance taxation. 

The Rule Where the Assets of an Estate are Lost During Administra¬ 
tion—The Treasurer of State adheres to the rule that the appraised 
value of the property is the basis of determining the amount of the in¬ 
heritance tax regardless of subsequent increase, or decrease, in value of 
the assets of the estate. This is the general rule of the several states. 
The cases cited below illustrate two phases of this question. 







ASSESSMENT AND COLLECTION 


83 


CALIFORNIA. 

In the case of Re Hite, 159 Cal. 392; 113 Pac. 1072; 32 L. R. A. (ns) 
1167, the executor, through misappropriation of funds caused a loss to 
the estate of nearly $99,000.00 and the administrator subsequently ap¬ 
pointed sought to have this sum deducted in determining the value of 
the estate for inheritance tax purposes. This relief was denied, the 
court holding that the tax is to be assessed on the value of the property 
at the time of the death of the testator, or intestate, and that subsequent 
appreciation or depreciation in value is immaterial. It further held that 
the state was in no way legally responsible for any act of an executor 
or administrator causing such loss or destruction, and the beneficiary’s 
loss in such a case is simply the character of loss that accrues to any 
owner of property lost or destroyed. Further, that whenever property 
actually vests in the beneficiary under the terms of a will, he receives it 
within the meaning of those decisions which declare that the amount of 
the tax is measured by the sum or property received by the legatee. 

NEW YORK. 

Where the estate shrinks through the destruction of the property or 
the assets are obliterated of all value during the process of administra¬ 
tion, without fault or delinquency on the part of the executor, it has 
been held in New York that he is entitled to a discharge even though the 
tax has not been paid where the assets of the estate are insufficient to 
meet the costs of administration. Re Meyer, 209 N. Y. 386; 103 NE. 
713; L. R. A. 1915C, 615. It ought to be further stated that the loss of 
the property in this case was not due to any fault of the beneficiary, unless 
failure to redeem property sold under a foreclosure proceeding can be 
termed such where there were no funds with which to redeem. 

Taxes Due from Devisees, Grantees, etc.—How Paid—Suit for 
Collection. Sec. 1481-al7, Supplement, 1913. It is hereby made 
the duty of all executors, administrators, trustees, or other per¬ 
sons charged with the management or settlement of any estate 
subject to the tax provided for in this act, to collect and pay to 
the treasurer of state the amount of the tax due from any devisee, 
grantee, donee, heir or beneficiary of the decedent, except in 
cases where payment of the tax is deferred until the determina¬ 
tion of a prior estate in which cases the treasurer of state shall 
collect the same. Executors, administrators, trustees, or the 
state treasurer, shall have power to sell so much of the property 
of the decedent as will enable them to pay said tax, in the same 
manner as is now provided by law for the sale of such property 
for the payment of debts of testators or intestates. The treas¬ 
urer of state may bring, or cause to be brought in his name of 
office, suit, for the collection of said tax, interest and costs, 
.against the executor, administrator, or trustee, or against the 


84 


COLLATERAL INHERITANCE TAX LAW 


person entitled to property subject to said tax, or upon any 
bond given to secure payment thereof, either jointly or .severally 
and obtaining judgment may cause execution to be issued thereon 
as is provided by statute in other cases. The proceedings shall 
conform as nearly as may be to those for the collection of ordi¬ 
nary debt by suit. If because of necessary litigation or other 
unavoidable cause of delay enforced payment of the tax hereby 
imposed, by suit and execution, would result in loss or be to the 
detriment of the best interests of the estate, the court may ex¬ 
tend the time for the payment of the tax. Such extensions of 
time shall not be granted except in cases where security is given 
for payment of the tax, interest and costs. 

The discharge of an executor before payment of the tax does not re¬ 
lieve the person or property from the payment of the same. See page 
120 hereof. 

Delay on the Part of the State in Asserting its Right to Levy the 
Inheritance Tax—Effect—There are no Iowa cases upon this point, but 
the general rule has been well stated to be, “that no laches is to be im¬ 
puted to the state and against her; that no time runs so as to bar her 
rights.” Josselyn v. Stone, 28 Miss. 753. This is the rule in the absence 
of an express statute limiting the state in its right to maintain an action 
for the collection of the inheritance tax. The reasoning of the following 
cases, and the soundness of the holdings cannot be doubted. The de¬ 
cisions of the Massachusetts court are of special interest as the statutes 
of that state contain provisions in accord with the statutes of this state. 
The Treasurer of State follows the rule of Massachusetts. 

KANSAS. 

The supreme court of Kansas has well stated the rule to be that 
statutory limitations do not run against the state when it sues in its 
sovereign capacity, unless the statute expressly includes the state or the 
legislative intention to include it is shown by the clearest implication. 
State v. Dixon, 90 Kans. 594; 135 Pac. 568; 47 L. R. A. (ns) 905. 

Following this rule, the Kansas court has held that no inaction, pro¬ 
crastination, or delay on the part of the public officers will prevent the 
state from collecting its inheritance tax. State v. Nagle, 100 Kans. 495; 
164 Pac. 1073; L. R. A. 1917E, 1160. The court adheres, in part, to the 
reasoning of the Massachusetts court in the case of Howe v. Howe, infra, 
where it is stated that the fact that there is no discharge of an executor 
until the tax is paid discloses an intention on the part of the legislature 
to preserve the lien of the tax until payment is actually made. 

MASSACHUSETTS. 

In the case of Howe v. Howe, 179 Mass. 546; 61 NE. 225; 55 L. R. A. 
626, it was held that in view of the provisions of the statute of Massa¬ 
chusetts providing, (1) that administrators, executors, and trustees were 
liable for the inheritance tax, with interest until paid, and (2) that the 


ASSESSMENT AND COLLECTION 


85 


tax was to be a lien on all property subject to the tax until paid, (3) 
that legacies chargeable upon real estate were subject to the tax and 
that the state had a lien on this real estate until the legacy was paid, 
and (4) that no final settlement with an executor or administrator was 
to be made until the tax was paid, that the statute of limitations would 
not bar the collection of this tax regardless of the length of time in¬ 
tervening between the accruing of the tax and the attempt of the state 
to assert its right thereto. This was the holding even though the statute 
provided that the treasurer shall bring suit within two years and six 
months after the executors and trustees file their bond. In short, the 
court held that nothing less than the payment of the tax itself will pre¬ 
vent the state from collecting the tax. 

NEW YORK. 

An affirmative statute of New York on the limitation of time af¬ 
fecting actions for the collection of the inheritance tax provides as fol¬ 
lows: “The provisions of the code of civil procedure relative to the lim¬ 
itation of time of enforcing a civil remedy shall not apply to any pro¬ 
ceeding or action taken to levy, appraise, assess, determine or enforce 
the collection of any tax or penalty prescribed by this article, and this 
section shall be construed as having been in effect as of date of the 
original enactment of the inheritance tax law, provided, however, that 
as to real estate in the hands of bona fide purchasers, the transfer tax 
shall be presumed to be paid and cease to be a lien as against such pur¬ 
chasers after the expiration of six years from the date of accrual.” Sec. 
245, Tax Law's of the State of New York, 1917. 

UNITED STATES. 

Mr. Justice Story, speaking in behalf of the supreme court in the 
early case of United States v. Kirkpatrick, 9 Wheat 724; 6 L. Ed. 200 ; 
203, in considering a defense urged that sureties on the official bond of 
a federal revenue collector were discharged because of delay in bringing 
action on the bond stated, “Then, as to the point of laches, we are of the 
opinion that the charge of the court below, which supposes that laches 
will discharge the bond, cannot be maintained as law. The general prin¬ 
cipal is that laches is not imputable to the government; and this maxim 
is founded not in the notion of extraordinary prerogative but upon a great 
public policy. The government can transact its business only through 
its agents; and its fiscal operations are so various, and its agencies so 
numerous and scattered that the utmost vigilance would not save the 
public from the most serious losses if the doctrine of laches can be ap¬ 
plied to its transaction. * * * Without going more at large into this 

question, we are of the opinion that mere laches of public officers con¬ 
stitutes no ground of discharge in the present case.” 

Nature of Action to Collect Tax—The proceeding to collect the in¬ 
heritance tax is not an equitable action. Re Lamb, 140 Iowa 89; 117 
NW. 1118; 18 L. R. A. (ns) 226. Such proceedings should conform as 
nearly as may be to those for the collection of ordinary debts, which 
would be a law action. 


86 


COLLATERAL INHERITANCE TAX LAW 


PROCEDURE. 

The original notice in such cases should follow the same form as in 
ordinary actions. The plaintiff should be the Treasurer of State in the 
name of his office. The petition should be in substantially the follow¬ 
ing form: 

Form No. 16. 

PETITION FOR COLLECTION OF TAX. 

IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 
. COUNTY. 


Term, A. D. 19_ 


E. H. Hoyt, as Treasurer 
of the State of Iowa, 
Plaintiff, 


vs. 

X, as administrator of the 
Estate of Z, deceased, and 
B. K. and L. K., 
Defendants. 


Law No. 

Petition at Law. 


The plaintiff for a cause of action against the defendants, states, that 
the plaintiff is 1 the Treasurer of the State of Iowa and authorized by 
virtue of law to bring this action in the name of his office. 

That the defendant X is the duly appointed and qualified administrator 
of the Estate of Z, deceased, and that B. K. and L. K. are the sole and 
only heirs of said decedent. 


That on or about the .day of.. 

the said Z, died intestate at. in the county of 

.and State of Iowa, possessed and seized of certain 

real and personal property which descends according to the laws of 
descent and distribution to a brother and a sister of said decedent, 
namely, B. K. and L. K. 

That the real and personal property of said decedent has been duly ap¬ 
praised by the appraisers of property charged or sought to be charged 
with the payment of the collateral inheritance tax, and that the appraised 

value of said property has been fixed at $.. and that the debts of said 

estate which may be properly deducted, as provided by law, from the 
value of said assets amount to $. 

That the property, and the persons entitled thereto, are subject to the 
payment of a collateral inheritance tax as provided by the laws of the 
State of Iowa and that the said tax amounts to the sum of $.. being 

.per centum of the value of the property to which said heirs 

have succession. 

That demand has been made upon said administrator and upon the 
aforesaid heirs for the payment of the tax required by law but that said 
administrator and said heirs have refused and failed to pay said tax, or 
any portion thereof, and still fail and refuse to pay said tax or any por¬ 
tion thereof, and that the sum is now wholly due and unpaid. 















ASSESSMENT AND COLLECTION 


87 


Wherefore, the plaintiff prays' that judgment may be entered against 
X, as administrator of the Estate of Z, deceased, and against B. K. and 

L. K., for the sum of $. with interest and penalty thereon from 

the . day of ., 19... 

together with the costs of this action, and that said judgment be decreed 
a lien upon the property of said Estate. 


Attorney for the Plaintiff. 

(Add usual verification.) 

Bequests to Executors or Trustees—When Liable to Collateral 
Inheritance Tax. —Sec. 1472 of the Code. Whenever a decedent 
appoints one or more executors or trustees and in lieu of their 
allowance or commission, makes a bequest or devise of property 
to them which would otherwise be liable to said tax, or appoints 
them his residuary legatees, and said bequests, devises or residu¬ 
ary legacies exceed what would be a reasonable compensation 
for their services, such excess shall be liable to such tax, and the 
court having jurisdiction of their accounts, upon its own motion 
or on the application of the treasurer of state, shall fix such 
compensation. 

See the following section which in case of a conflict should prevail as 
it was enacted after the foregoing section of the Code. Edgar v. Greer, 
(1859) 8 Iowa 393a. 

Bequests to Executors or Trustees Subject to Tax. —Sec. 1481- 
a21, Supplement, 1913. Whenever a decedent appoints ‘one or 
more executors or trustees and in lieu of their allowance or com¬ 
mission, makes a bequest or devise of property to them which 
would otherwise be liable to said tax, or appoints them his 
residua^ legatees, and said bequests, devises or residuary lega¬ 
cies exceeds the statutory fees as compensation for their services, 
such excess shall be liable to such tax. 

See the preceding section of the Code and the notation thereunder. 

The Treasurer of State has followed the rule that an executor who 
receives 1 a bequest exceeding in value the fees allowed by law shall be 
subject to the tax on the excess value. See page 49 hereof for the rule 
by which the fees of an executor are determined. 

Tax on Legacies Charged Upon or Payable Out of Real Estate 
—Lien of Tax—Who Must Pay. —Sec. 1473 of the Code. When¬ 
ever any legacies subject to said tax are charged upon or pay¬ 
able out of any real estate, the heir or devisee, before paying the 






88 


COLLATERAL INHERITANCE TAX LAW 


same, shall deduct said tax therefrom and pay it to the executor, 
administrator, trustee or treasurer of state, and the same shall 
remain a charge and be a lien upon said real estate until it is 
paid; and payment thereof shall be enforced by the executor, 
administrator, trustee or treasurer of state in his name of office, 
in the same manner as the payment of the legacy itself could he 
enforced. 

See the following section which in case of a conflict should prevail as 
it was enacted after the passage of the Code above set forth. Edgar v. 
Greer, (1859) 8 Iowa 393a. 

Legacies Charged upon Real Estate.—Sec. 1481-a22, Supple¬ 
ment, 1913. Whenever any legacies subject to said tax are 
charged upon or payable out of any real estate, the heir or dev¬ 
isee, before paying the same, shall deduct said tax therefrom and 
pay it to the executor, administrator, trustee or treasurer of state, 
and the same shall remain a charge against and be a lien upon 
said real estate until it is paid; and payment thereof shall be en¬ 
forced by the executor, administrator, trustee or treasurer of 
state in his name of office as herein provided. 

See the preceding section of the Code and the notation thereunder. 

Payment of Tax by Executor or Trustee. Sec. 1474 of the Code. 
Every executor, administrator or trustee having in charge or 
trust any property subject to said tax, and which is made pay¬ 
able by him, shall deduct the tax therefrom, or shall collect the 
tax thereon from the legatee or person entitled to said property, 
and he shall not deliver any specific legacy or property subject 
to said tax to any person until he has collected the tax thereon. 

See the following section which in case of a conflict should prevail as 
it was enacted after the passage of the section of the Code above set forth. 

Tax Deducted from Legacy or Collected from Legatee.—Sec. 
1481-al8, Supplement, 1913. Every executor, administrator, 
referee or trustee having in charge or trust any property of an 
estate subject to said tax, and which is made payable by him, 
shall deduct the tax therefrom or shall collect the tax thereon 
from the legatee or person entitled to said property and pay the 
same to the treasurer of state, and he shall not deliver any spe¬ 
cific legacy or property subject to said tax to any person until 
he has collected the tax thereon. 

See the preceding section of the Code and the notation thereunder. 


ASSESSMENT AND COLLECTION 89 

Delinquent Taxes to Draw Interest. —Sec. 1481-a23, Supplement 
1913. All taxes imposed by this act shall be payable to the treas¬ 
urer of state, and except when otherwise provided in this act, 
shall be paid within eighteen (18) months from the death of the 
testator or intestate. All taxes not paid within the time pre¬ 
scribed in this act shall draw interest at the rate of eight per 
centum per annum thereafter until paid. 

Where an interest in real property is given to another for a term of 
years or for life the tax must be paid within one year from the owner’s 
death. See sec. 1481-all, Supplement, 1913, page 106, hereof. 

Collateral Inheritance Tax and Lien Book. —Sec. 1481-a25 y 
Supplement, 1913. The clerk of the district court in and for each 
county shall provide and keep a suitable book, substantially 
bound and suitably ruled, to be known as the collateral inheri¬ 
tance tax and lien book, in which shall be kept a full and ac¬ 
curate record of all proceedings in cases where property is 
charged or sought to be charged with the payment of a collateral 
inheritance tax under the laws of this state, to be printed and 
ruled so as to show upon one page. 

(1) The name, place of residence, and date of death of the de¬ 
cedent. 

(2) Whether the decedent died testate, or intestate, and if 
testate, the record and page where the will was probated and 
recorded. 

(3) The name and postoffice address of the executor, admin¬ 
istrator, trustee, or grantee, with the date of appointment or 
transfer. 

(4) The names, postoffice addresses and relationship, if 
known, of all the heirs, devisees and grantees. 

(5) The appraised valuation of the personal property. 

(6) The amount of inheritance tax due upon said personal 
property. 

(7) A record of payment with amount and date. 

(8) Date of filing objections and names of objectors. 

(9) Blank for index and reference to all proceedings and for 
memorandum entries of the court or judge in relation thereto. 

Upon the opposite page of such record shall be printed. 

(1) Real estate derived from .(naming 

decedent) which is subject to the lien prescribed by the statute 
for collateral inheritance tax. 



90 


COLLATERAL INHERITANCE TAX LAW 


(2) A full and accurate description of such real estate, by 
forty-acre or fractional tracts, or by lots, or other complete in¬ 
dividual description. 

(3) The appraised valuation as reported by the appraisers, 
with a reference to the record of their report, as to each piece of 
such real estate. 

(4) The amount of the inheritance tax due upon each such 
piece. 

(5) A record of payments, with dates and amounts. 

Entries made by Clerk in Lien Book.—Sec. 1481-a29, Supple¬ 
ment, 1913. The clerk shall enter upon the collateral inheritance 
tax and lien book, the title of all estates subject to the inheri¬ 
tance tax as shown by the inventories or lists of heirs filed in 
his office, or as reported to him by the county attorney, treas¬ 
urer of state, or other person, and shall enter in said book as 
against each estate or title at the appropriate place, all such 
information relating to the situation and condition of the estate 
as he may be able to obtain from the papers filed in his office, 
or from any other source, as may be necessary to the collection 
and enforcement of the tax. He shall also immediately index in 
the book kept in his office for that purpose, all liens entered upon 
the collateral inheritance tax and lien book. Failure to make such 
entries as are herein required, shall not operate to relieve the 
estate from the lien or defeat the collection of the tax. 

Failure to Make Entry—Liability of Clerk—Should a clerk fail to 
enter in the tax and lien hook of an estate subject to the payment of an 
inheritance tax, and injury results therefrom to an innocent purchaser, 
he would be liable on his bond for the damage resulting therefrom. Steel 
& Johnson v. Bryant et al., (1878) 49 Iowa 116. The clerk is also liable 
for the acts of his deputies in this' matter and if he is required to reim¬ 
burse any person as a result of the negligence of his deputy, he may 
maintain an action on the deputy’s bond. Moore v. McKinley et al., 
Exrs., (1882) 60 Iowa 369; 14 NW. 769. For wilful or habitual neglect or 
failure to perform the duties of his office, the clerk is subject to the re¬ 
moval laws of this state. Section 1258-c, Supplement, 1913, as amended by 
37th G. A. Chap. 391. 

Duty of Clerk to Keep Probate Record.—Sec. 1481-a30, Sup¬ 
plement, 1913. In all cases entered upon the inheritance tax and 
lien book, the clerk shall make a complete record in the proper 
probate record, of all the proceedings, orders, reports, inventory, 
appraisements and all other matters and proceedings therein. 


ASSESSMENT AND COLLECTION 


91 


Delivery of Securities and Assets to Executors, etc.—Liability 
of Bank, Trust Company or Any Individual. —Sec. 1481-a36, Sup¬ 
plement, 1913. No safe deposit company, trust company, bank or 
other institution, person or persons holding securities or assets 
of the decedent shall deliver or transfer the same to the executor, 
administrator or legal representative of said decedent unless the 
tax for which such securities or assets are liable under this act 
shall be first paid, or the payment thereof is secured by bond as 
herein provided. It shall be lawful for and the duty of the treas¬ 
urer of state personally, or by any person by him duly author¬ 
ized, to examine such securities or assets at the time of any pro¬ 
posed delivery or transfer. Failure to serve ten days’ notice of 
such proposed transfer upon the treasurer of state or to allow such 
examination on the delivery of such securities or assets to such 
executor, administrator or legal representative shall render such 
safe deposit company, trust company, bank or other institu¬ 
tion, person or persons liable for the payment of the tax upon 
such securities or assets as provided in this act. 

See the provisions of the following section requiring corporations to 
report transfer of corporate stock. 

Every deposit company, trust company, bank or other institution and 
every individual (or individuals) is liable for the payment of the in¬ 
heritance tax on securities which are delivered to any executor, etc., 
unless, (1st) the tax is paid, or (2nd), unless security is given for the 
payment thereof. Notice given to the Treasurer of State of the intention 
to deliver the assets to the executor does not release the bank or person 
from liability for the tax. 

In addition to the foregoing section, attention should be given to the 
provision of section 1481-al5, Supplement 1913, page 122 hereof, wherein 
anyone who removes property from this state without first having paid 
the tax as required by law, or without giving security for the payment 
thereof, may be convicted of a felony and subjected to fine and im¬ 
prisonment. 

See section 1481-al4, Supplement 1913, page 122 hereof, for the law 
relating to the amount and condition of a bond for payment of the in¬ 
heritance tax. 

ILLINOIS. 

The constitutionality of a similar statute was sustained in the case of 
National Safe Deposit Co. v. Stead et al, (1911) 250 Ill. 584; 95 NE. 973; 
Ann. Cas. 1912B, 430. 

PROCEDURE. 

The notice to the Treasurer of State may be in substantially the fol¬ 
lowing form: 


92 


COLLATERAL INHERITANCE TAX LAW 


Form No. 17. 

NOTICE OF INTENTION TO DELIVER SECURITIES TO EXECUTOR. 

To E. H. Hoyt, Treasurer of the State of Iowa: 

You are hereby notified that the undersigned has in its possession cer¬ 
tain securities and assets belonging to.. 

late of .(name city).. .County, 

State of .; and that we intend to de¬ 
liver the said securities and assets to.. as 

executor (or legal representative) of the Estate of said decedent at our 

said place of business in .. County of 

.and State of Iowa on the.. 

day of.,19__ at.o’clock ... M. 

You are therefore notified to govern yourself accordingly. 

Dated the .day of.19.... 


By.(title).... 

Duty of Corporations to Report Certain Stock Transfers to 
Treasurer of State. —Sec. 1481-a38, Supplement, 1913. All Iowa 
corporations organized for pecuniary profit, shall on July 1st of 
each year, by its proper officers under oath make a full and cor¬ 
rect report to the treasurer of state of all transfers of its stocks 
made during the preceding year by any person who appears on 
the books of such corporation as the owner of such stock, when 
such transfer is made to take effect at or after the death of the 
owner or transferor, and all transfers which are made by an ad¬ 
ministrator, executor, trustee, referee, or any person other than 
the owner or person in whose name the stocks appeared of record 
on the books of such corporation,, prior to the transfer thereof. 
Such report shall show the name of the owner of such stocks and 
his place of residence, the name of the person at whose request 
the stock was transferred, his place of residence and the author¬ 
ity by virtue of which he acted in making such transfer the name 
of the person to whom the transfer was made, and the residence 
of such person; together with such other information as the of¬ 
ficers reporting may have relating to estates of persons deceased 
who may have been owners of stock in such corporation. If it 
appears that any such stock so transferred is subject to tax under 
the provisions of this act, and the tax has not been paid, the 
treasurer of state shall notify the corporation in writing of its 


i 
















ASSESSMENT AND COLLECTION 


93 


liability for the payment thereof, and shall bring suit against 
such corporation as in other cases herein provided unless pay¬ 
ment of the tax is made within sixty (60) days from the date of 
such notice. 

See the preceding section as to liability of a corporation for delivering 
assets to executor without the inheritance tax having first been paid. 

Transfer of Corporate Stock—Liability of Corporation. —Sec. 
1481-a37, Supplement, 1913. If a foreign executor, administrator 
or trustee shall assign or transfer any corporate stock or obliga¬ 
tions in this state standing in the name of a decedent, or in trust 
for a decedent, liable to such tax, the tax shall be paid to the 
treasurer of state on or before the transfer thereof; otherwise the 
corporation permitting its stock to be so transferred shall be 
liable to pay such tax, interest, and costs, and it is the duty of the 
treasurer of state to enforce the payment thereof. 

Foreign Estates—Must File Inventory and List of Beneficiaries_ 

Every foreign estate having property within the State of Iowa is required 
to file an inventory of the assets of the estate located within this State 
and also a list of the beneficiaries of the estate. The Treasurer of State 
will supply foreign executors with the necessary blanks for making the 
required reports. The form is substantially as follows: 

Form No. 18. 

REPORT OF FOREIGN ESTATE TO THE TREASURER OF THE 

STATE OF IOWA. 

In the Matter of the Estate of ) 

., Deceased, v Inventory and Beneficiaries. 

ot.County,. ) 

( Administrator of 

Comes now the undersigned. ^ Trustee 

( Executor 

the above entitled estate and states that the said.was 

a resident of., State of. and that 

said decedent died | Estate on the....day ot. 

19.., possessed of the following property located in the State of Iowa. 


Div. 1 CORPORATE STOCK OF IOWA CORPORATIONS 


No. of 
Shares 


Name of Corporation 


P. O. Address of Appraised value 

Corporation Instr. No. 1 



























94 COLLATERAL INHERITANCE TAX LAW 

Div. 2 PERSONAL PROPERTY OTHER THAN CORPORATE 

STOCK. 


Description 

Name and Location of Person or Institution 
Where Deposited 

Appraised Value 










Div. 3 


REAL PROPERTY 


Description 

Sec. 

Twp. 

Rng. 

Lot 

Block 

County 
















BENEFICIARIES. 

(See Instruction No. 2.) 


Names 

Relationship to Decedent 

Residence 








ESTIMATED ASSETS AND LIABILITIES OF ENTIRE ESTATE 

(See Instruction No. 30 

The assets of the entire estate are estimated to be of the gross value 

of . $. 

The debts of the entire estate are estimated to amount to $. 

The foregoing is a full, true and complete statement of said estate, lo¬ 
cated within the state of Iowa at the date of the owner’s death, and of 
the beneficiaries and their place of residence as I verily believe. 


Administrator 

Executor 

Trustee 

Subscribed and sworn to before me and in my presence by the said 
.this.day of., 19... 


Notary Public in and for 


County. 


My Commission expires 

























































ASSESSMENT AND COLLECTION 


95 


INSTRUCTIONS. 

No. 1. If the property has been appraised, state the appraised value 
In this column. 

No. 2. The Treasurer of State will refuse to accept this report unless 
the name, relationship, and P. O. address is given. 

No. 3. These estimates should include the entire estate regardless of 
location of the assets, or where the debts are payable. 


In addition to requiring the foregoing report the Treasurer of State 
has authority to demand certified copies of wills, deeds, or other papers 
on file in the court having original probate jurisdiction before issuing a 
receipt for the payment of the tax. See further on this matter, sec. 1481- 
a24, Supplement, 1913, as amended by 35 G. A., Chap. 121, page 115 hereof. 

Foreign Estates—Procedure—When Appraisement Must Be Made— 
Not all foreign estates are required to take out ancillary administration 
in this state. But if the estate consists in whole, or in part, of real property 
passing to persons subject to the collateral inheritance tax of Iowa there 
must be ancillary administration. The Treasurer of State adheres to the 
rule that appraisal of real property made in a foreign state by foreign ap¬ 
praisers will not be adopted as the appraised value of the real property, 
therefore it is necessary that administration be had in Iowa and the 
property duly appraised by appraisers within this state. Administration 
should be applied for in the county wherein the real property is located; 
if located in several counties, administration in any one county will 
suffice. 

For the law relating to local or domestic estate see page 78 hereof. 

Foreign Estates—When Relief from Appraisement may be Obtained 
—Procedure.—If the assets of the foreign estate within the state of 
Iowa consist of shares of stock or personal property, it is not necessary 
that ancillary administration be had in this state or that the property be 
appraised here. For illustration, suppose John Doe died intestate, a citi¬ 
zen of Virginia, owning a hundred shares of stock in the Bankers Trust 
Company of Des Moines, this being all the property he owned within 
Iowa; and that in the process of administering upon his estate in Vir¬ 
ginia, the shares of stock have been duly appraised by appraisers ap¬ 
pointed in Virginia. As a rule the Treasurer of State is willing to accept 
such appraisement as the appraised value for Iowa inheritance tax. pur¬ 
poses, and therefore the Treasurer is willing to dispense with appraise¬ 
ment in this state. In such case the foreign executor or administrator 
should obtain from the Treasurer of the State of Iowa, a blank form such 
as Form No. 19 herein and make his request to the Treasurer of 
State. If the executor’s report is found to be fair and in proper form the 
Treasurer of State may accept it as a basis for the taxation of the inheri-' 
tance tax. In event the Treasurer of State approves the report he will 
petition the court, usually the district court of Polk County, located at 
Des Moines, for relief from appraisement. The estate is then entered 
upon the probate records of the proper county and the relief prayed for 



96 


COLLATERAL INHERITANCE TAX LAW 


granted. There is no fee charged for entering the estate on the probate 
records or in the collateral inheritance lien record, unless the estate is 
wholly, or in part, administered upon within this state. 

Form No. 19. 

REQUEST FOR ACCEPTANCE OF FOREIGN APPRAISAL, ETC. 

(See Instruction 1) 

In the Matter of. the Estate of 

.I Probate No... 

Deceased. J 

To the Treasurer of the State of Iowa: 

Executor 

Comes now the undersigned Administrator of the above named estate 

Trustee 

and asks that the appraised value of the property listed in Divisions 1 
and 2 of the Inventory of Assets belonging to said Estate located within 
the State of Iowa, and which has heretofore been filed with the Treasurer 
of the State of Iowa, be accepted by said Treasurer as the basis for the 
taxation of the Collateral Inheritance Tax imposed by the laws of the 
State of Iowa. 

This applicant further states that the property reported in Divisions 


1 and 2 of said Inventory was duly appraised on the.day of 

.. 19...., at .. in the State of 


, in the manner and form required by the laws of the 


state of. 

This applicant further states that.(See In¬ 
struction No. 2) is willing to charge -self with the full appraised 

value of said property as shown in said Inventory as the basis for the 
assessment of the tax imposed by the State of Iowa. 


Dated at .. .. this 

day of ., 19. 


Subscribed and sworn to by 


this.day of 


19... 


Executor 

Administrator 

Trustee 


before me 


Notary Public in and for 


County. 


State of 






















ASSESSMENT AND COLLECTION 


97 


IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 

.COUNTY 

(See Instruction No. 3) 

In the Matter of the Estate of l Foreign Estate 

. . Treasurer’s Application for Relief 

Deceased. J from Local Appraisement 

Comes now E. H. Hoyt, Treasurer of the State of Iowa, and to the 
Court states: 

That on the.day of.. 19.the above named 

decedent died possessed of certain personal property situated within the 

Trustee 

State of Iowa that the Administrator of said estate has filed a verified 

Executor 

Inventory of the assets of said estate with the applicant whereby it ap¬ 
pears said personal property is described as consisting of the items herein 
noted, and that the value assigned to each item has been thus fixed by 
the appraisers in the manner and form required by the laws of the 

State of . 


Div. 1 CORPORATE STOCK OF IOWA CORPORATIONS 


No. of Shares 

Name of Corporation 

P. 0. Address of Corporation 

Appraised Value 












Div. 2 PERSONAL PROPERTY OTHER THAN CORPORATE 

STOCK 


Description 

Name and Location of Person or 
Institution where Deposited 

Appraised Value 





A 




Total Value of Personal Property and Corporate Stock 




That at the time of the death of said decedent he was a resident of the 

City of.. County of. and State of.; 

and that all or part of the property herein described passes to collateral 
beneficiaries and is therefore subject to the provisions of the Iowa law 
imposing a tax upon collateral inheritances or transfers. 

That from the aforesaid Inventory now in the possession of this ap¬ 
plicant it appears that said property has been duly appraised at the 
domicile of the decedent in the manner and the farm required by law, 
and that the values above stated are the ones respsectively given to each 
of said items. 

7 













































98 


COLLATERAL INHERITANCE TAX LAW 


If further appears that.is willing to charge 

.self with the full face value of said property as valued by the for¬ 
eign appraisers as a basis for the assessment of the inheritance tax im¬ 
posed by the State of Iowa. 

This applicant further states that the exact amount of said tax can 
be determined without resort to the regular proceedings for the appraise¬ 
ment of property within this state comprising the estate, and that a 
waiver of appraisement by appraisers appointed by this court would not 
be to the detriment of the State of Iowa. 

WHEREFORE, this applicant hereby consents to the relief of the 
aforesaid Estate from the regular appraisement required under the laws 
of the State of Iowa, and this applicant prays that an order be granted 
relieving said Estate from the necessity of local appraisement and that 
the Treasurer of State be authorized to accept said foreign appraisement 
as the basis for imposing the collateral inheritance tax provided by the 
laws of the State of Iowa. 


By 


Treasurer of State. 


Deputy. 


ORDER OF COURT GRANTING RELIEF 
IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 
...COUNTY. 

BE IT REMEMBERED, that on this.day of.. 

19...., the within application came on for hearing and it appearing that 
the inheritance tax can be determined without resort to a local appraise¬ 
ment of said property, it is hereby ordered that, for the reasons stated 
in the within application, the said Estate be, and the same is hereby 
relieved from local appraisement as required by law for the assessment 
of an inheritance tax. 

It is further ordered and decreed that the Treasurer of State be, and 
hereby is authorized to accept said foreign appraisement as the basis 
upon which to impose the inheritance tax required by the laws of the 
State of Iowa. 

t 


Judge of the.Judicial District. 

INSTRUCTIONS. 

No. 1. If any foreign Estate desires to be relieved from the necessity 
of having the property of the Estate appraised in the State of Iowa, this 
REQUEST FOR ACCEPTANCE OF FOREIGN APPRAISEMENT MUST 
BE MADE. 

After receiving this Request the Treasurer of State will apply to the 
proper court for an order granting such relief. 

Real property must be appraised by appraisers appointed by a court 
of the State of Iowa. Foreign appraisement will not be accepted. This re¬ 
lief applies only to personal property. 












ASSESSMENT AND COLLECTION 99 

No. 2. State the name of the person willing to charge himself with 
the full appraised value of the property as the basis for the imposition 
of the Iowa inheritance tax. The executor, administrator, or trustee 
may charge himself with the tax or any heir or beneficiary may do so. It 
is necessary that the name of the person willing to pay a tax on the basis 
of the appraised value be inserted in this place. 

No. 3. Foreign Executors, etc., should make no entries of this page. 
The Treasurer of State will fill in this part of the Application. 

Foreign Estates—Deduction of Debts. —See. 1481-a39, Supple¬ 
ment, 1913. Whenever any property belonging to a foreign es¬ 
tate, which estate in whole or in part passes to persons not ex¬ 
empt herein from such tax, the said tax shall be assessed upon 
the market value of said property remaining after the payment 
of such debts and expenses as are chargeable to the property 
under the laws of this state. In the event that the executor, ad¬ 
ministrator or trustee of such foreign estate files with the clerk 
of the court having ancillary jurisdiction, and with the treasurer 
of state, duly certified statements exhibiting the true market 
value of the entire estate of the decedent owner, and the indebt¬ 
edness for which the said estate has been adjudged liable, which 
statements shall be duly attested by the judge of the court having 
original jurisdiction, the beneficiaries of said estate shall then 
be entitled to have deducted such proportion of the said indebted¬ 
ness of the decedent from the value of the property as the value 
of the property within this state bears to the value of the entire 
estate. 

Marshalling of Assets—The purpose of this statute is to prevent 
what is called “marshalling of assets”. By this is meant that it is to pre¬ 
vent collateral heirs from deducting or paying all debts of the estate from 
property in this state and then taking the property located in another 
state free from a collateral inheritance tax of Iowa. 

The following case illustrates the law in operation; thus, where the 
entire assets of the estate consisting of property in both New York and 
Iowa amounts to $167,371.00 and property in Iowa is valued at $43,762.00 
and the debts of the estate amount to $16,300.00, the proportion of debts 
to be charged against the property in Iowa should be $4,262.00, leaving 
property of the net value of $39,500.00 subject to the tax. Wieting v. 
Morrow, (1911) 151 Iowa 590; 133 NW. 193. 

MASSACHUSETTS. 

In the case of Kingsbury v. Chapin, (1907) 196 Mass. 533; 82 NE. 462, 
it was held the executors could not evade the tax of Massachusetts by 
using the property within that state for the payment of the debts and 
legacies, to the exemption of the property in New .Hampshire, the de- 


100 


COLLATERAL INHERITANCE TAX LAW 


cedent’s domicile. The proper procedure would be to charge the debts 
and the legacies and expenses of administration upon all the assets of 
the estate, and thus render the assets in Massachusetts chargeable with 
only a proportional part thereof. 

Property of Foreign Estates in Iowa not Specifically Devised. 

Sec. 1481-a40, Supplement, 1913. Whenever any property, real or 
personal, within this state belongs to a foreign estate and said 
foreign estate passes in part exempt from the tax imposed by 
this act and in part subject to said tax and there is .no specific 
devise of the property within this state to direct heirs or if it is 
within the authority or discretion of the foreign executor, ad¬ 
ministrator or trustee administering the estate to dispose of the 
property not specifically devised to direct heirs or devisees in 
the payment of debts owing by the decedent at the time of his 
death, or in the satisfaction of legacies, devises, or trusts given 
to direct or collateral legatees or devisees or in payment of the 
distributive shares of any direct and collateral heirs, then the 
property within the jurisdiction of this state, belonging to such 
foreign estate, shall be subject to the tax imposed by this act, 
and the tax due thereon shall be assessed as provided in the 
next preceding section of this act relating to the deduction of 
the proportionate share of indebtedness. Provided, however, 
that if the value of the property so situated exceeds the total 
amount of the estate passing to other persons than those exempt 
hereby from the tax imposed by this act such excess shall not be 
subject to said tax. 

See the case illustrating method of deducting debts given in annota¬ 
tions in preceding section. It is proper to charge bequests to collateral 
heirs for right to succession of property in the same manner. In the 
case of Wieting v. Morrow, (1911) 151 Ibwa 590; 132 NW. 193, the total 
debts were applied pro rata to property in Iowa likewise the entire as¬ 
sets located in Iowa were applied pro rata to every provision of the will, 
including the widow’s interest therein. 

Compromise Settlement—How Approved.— Sec. 1481-a41, Sup¬ 
plement, 1913. Whenever an estate charged or sought to be 
charged with the collateral inheritance tax is of such a nature, 
or is so disposed, that the liability of the estate is doubtful, or the 
value thereof cannot with reasonable certainty be ascertained 
under the provisions of law, the treasurer of state may, with the 
written approval of the attorney general, which approval shall 
set forth the reasons therefor, compromise with the beneficiaries 
or representatives of such estates, and compound the tax thereon; 


ASSESSMENT AND COLLECTION 


101 


but said settlement must be approved by the district court or 
judge of the proper court, and after such approval the payment 
of the amount of the taxes so agreed upon shall discharge the 
lien against the property of the estate. 

Refunding of Tax When Wrongfully Exacted—Procedure.— 
Sec. 1481-a43, Supplement, 1913. When within'five years after 
the payment of the tax, a court of competent jurisdiction may de¬ 
termine that property upon which a collateral inheritance tax 
has been paid is not subject to or liable for the payment of such 
tax, or that the amount of tax paid was excessive, so much of 
such tax as has been overpaid to the treasurer of state shall be 
returned or refunded to the executor or administrator of such 
estate, o%* to those entitled thereto, when a certified copy of 
the record of such court showing the fact of non-liability of such 
property to the payment of such tax has been filed with the ex¬ 
ecutive council of the state, the executive council shall if the case 
has been finally determined issue an order to the auditor of state 
directing him to issue a warrant upon the treasurer of state to 
rafund such tax. Such order of court shall not be given until 
fifteen days’ notice of the application therefor shall have been 
given to the treasurer of state of the time and place of the hearing 
of such application, which notice shall be served in the same 
manner as provided for original notices. 

While a refund may be ordered for taxes erroneously exacted, yet no 
interest is to be refunded thereon, as the statute makes no provision 
therefor. Wieting v. Morrow, (19-11) 151 Iowa 590; 132 NW. 193. 

For a case where a refund was made to a non-resident alien heir after 
the estate had escheated to the estate, see McKeown v. Brown, Treas., 
(1914) 167 Iov/a 489; 149 NW. 593, cited in annotations on page 142 
hereof. See also this same case on second appeal, McKeown v. Morrow, 

(1918) - Iowa -; 167 NW. 193, on the proposition as to interest 

on funds held by the state as having escheated. (Inheritance taxation 
not involved.) 

The foregoing section makes provision for the refunding of any tax 
erroneously exacted from any person, and sets out the method of pro¬ 
cedure. If any person is required to pay a greater sum than he should 
be required to pay on account of a mere clerical error in computing the 
tax, it is not necessary to ask for a refund in the usual manner, but the 
person should point out to the Treasurer of State the fact that an error 
has been committed and the matter will be taken care of by the Treas¬ 
urer. In all other cases where a refund is desired, it is necessary that 
a petition be presented to the district court asking that an order be 
entered showing non-liability. 




102 


COLLATERAL INHERITANCE TAX LAW 


PROCEDURE. 

Anyone desiring to obtain a refund should present a petition to the 
district court in substantially the following form, varying it, of course, 
according to the facts of the case. 

Form No. 20. 

PETITION FOR REFUND. 

IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 
.COUNTY. 


X 

Plaintiff, 

vs. 

E. H. Hoyt, as 
Treasurer of the 
State of Iowa. 

Defendant. 


Law No. 

f Petition for a Refund of Inheritance Tax. 


Comes now, X 
states: 


the above named plaintiff and to the court 


That on or about the.day of.. 19...., one 

.Z.. died intestate at.. in the County of 

• 

., and State of Iowa; that at the time of his 

death he was possessed of real and personal property of the gross value 

of $.. and that there was properly allowed and deducted from 

this said sum the debts of said decedent and the costs of administration 
totaling $. •....; that there remained, subject to the collateral in¬ 
heritance tax of the State of Iowa, the sum of $. 

That this petitioner was entitled to an undivided.interest 

in said estate, valued at $., as one of the heirs at law of the said 

decedent; that on succession to said sum this petitioner was liable for 
the payment of an inheritance tax equal to five per cent (5%) of the sum 
to which he had succession. 

That at all the times mentioned herein this petitioner was a resident 

of .. England, and a subject and citizen of the Kingdom 

of Great Britain. 

That in disregard of, and in violation of the treaty existing between 
the United States and the Kingdom of Great Britain, the State of Iowa 
proceeded to and did collect from this petitioner a sum equal to ten per 
cent (10%) of the value of the property to which this, petitioner was en¬ 
titled to have succession to. And that by reason of said unlawful assess¬ 


ment the sum of $.was erroneously exacted from this petitioner. 

That on the. day of .19_, this said peti¬ 


tioner paid to the Treasurer of State the sum of $., as shown 

by the receipt of the Treasurer of State, a copy of which is hereto at¬ 
tached and marked Exhibit “B.” 

Wherefore, the petitioner prays that the court enter an order fixing 
the time and place for the hearing of this petition, that upon such hear¬ 
ing an order be entered showing the fact of the non-liability of this peti- 



















ASSESSMENT AND COLLECTION 


103 


tioner for a collateral inheritance tax in excess of the sum of $.. 

and that said order further show that the sum of $. was erro¬ 

neously exacted from this petitioner as herein set forth. And that the 
costs of this action be taxed as provided in Sec. 1481-a35, Supplement, 1913. 


Plaintiff’s attorneys. 

State of Iowa, l ss. 

. County. J 

.X., being first duly sworn depose and say 

that I am the plaintiff in the above entitled action; that I am acquainted 
with the facts and statements contained in said petition and that the 
same are correct and true as I verily believe. 


(Signature of Plaintiff.) 

Subscribed and sworn to by .X.before me this 


day of 


, 19 


Notary Public in and for.County. 

The petition of the plaintiff should have been attached thereto an 
order whereby the court may fix the time and the place of the hearing 
of the application. This order should fix the date far enough ahead so 
as to give the Treasurer of State fifteen days notice thereof. The order 
should he in substantially the following form: 

Form No. 21. 

ORDER FIXING THE DATE OF HEARING ON PETITION FOR 

REFUND. 

The hearing of the petition of the plaintiff herein for a refund of 
collateral inheritance taxes alleged to have been erroneously exacted is 

hereby fixed for the . day of.. 19-- at 

. M., o’clock at the court house in . county, 

State of Iowa. 


Judge. 

After the court has fixed the time when the petition for a . refund will 
be heard, it is necessary that the petitioner serve the Treasurer of State 
with a notice setting forth the time and place of the hearing. This 
notice may be served in the same manner as original notices are served. 
As a matter of practice, however, the notice may be mailed to the Treas¬ 
urer of State and he will accept service thereof and thus avoid the ex¬ 
pense of having an officer serve the same. 

The notice should be in substantially the following form: 



















104 


COLLATERAL INHERITANCE TAX LAW 


Form No. 22. 


NOTICE OF A PETITION FOR REFUND. 

IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR 


COUNTY. 


X 

Plaintiff, 

vs. 


Law No, 


E. H. Hoyt, as 
Treasurer of the 
State of Iowa, 

Defendant. 


• Notice of the Filing of a Petition for a 
Refund of Inheritance Tax, and the Time 
and Place of Hearing. 


\ 


To E. H. Hoyt, as Treasurer of the State of Iowa: 

You are hereby notified that there is now on file in the office of the 

clerk of the district court of the State of Iowa, in and for. 

County, the petition of the plaintiff in the above entitled cause alleging 

that the sum of $. was erroneously exacted from this plaintiff 

as an inheritance tax on his succession to property belonging to the 

estate of .Z.. deceased, of . 

county and state of Iowa. 

That the petitioner bases his claim for a refund upon the following 

facts, to-wit:.(state facts briefly). 

You are further notified that by an order of one of the judges of said 
district court, that the time for hearing on the petition for a refund has 

been fixed for the . day of .. 19...., at 

. o’clock, .M, before the Honorable . 

one of the judges of said court, said hearing to be at the courthouse 
In said county, at which time you are at liberty to appear and show 
cause, if any, why an order should not be entered showing non-liability 
on the part of this petitioner for the tax claimed in his petition to have 
been erroneously exacted; and for such taxation of the costs of this ac¬ 
tion as the court may deem just and equitable. 

Dated this.day of.,19. 


Attorneys for Plaintiff. 

If the court finds that the petitioner has been required to pay a 
greater sum than he ought to have paid, an order showing such finding 
should be entered of record. The petitioner should then obtain’a cer¬ 
tified copy of the record of the court in the matter and forward the 
same to the Executive Council of the State of Iowa, at Des Moines. If 
the Executive Council finds the order of court to be what is known as 
a final order, it may direct the Auditor of State to issue a warrant 
upon the Treasurer for the tax wrongfully exacted. This is the only 
method of obtaining a refund except in case of a clerical error as pointed 
out on page 101 hereof. 



















ASSESSMENT AND COLLECTION 


105 


Assessment and Taxation of Remainders—Deductions in Ap¬ 
praisements—Payment of Tax—Default.— Sec. 1470 of the Code. 
When any person whose estate, over and above the amount of 
his just debts, exceeds the sum of one thousand dollars shall be¬ 
queath or devise any real property to or for the use of the father, 
mother, husband, wife, lineal descendant, adopted child, or lineal 
descendant of such child, during life or a term of years, and the 
remainder to a collateral heir or a stranger to the blood, the 
court, upon the determination of such estate for life or years, 
shall, upon its own motion or upon the application of the treas¬ 
urer of state, cause such estate to be appraised at its then actual 
market value, from which shall be deducted the value of anj^ 
improvements thereon, or betterments thereto, if any, made by 
the remainder man during the time of the prior estate, to be 
ascertained and determined by the appraisers, and the tax on the 
remainder shall be paid by such remainder man within sixty days 
from the approval by the court of the report of the appraisers.. 
If such tax is not paid within said time, the court shall then 
order said real estate, or so much thereof as shall be necessary 
to pay such tax, to be sold. 

See the two following sections which should prevail in case of a 
conflict as they were enacted after the passage of the provision of the 
Code above set forth. 

Where the total value of the entire estate, after deducting debts, is 
less than $1,000.00 in value, the estate is exempt; if over that sum all 
property passing to collateral heirs is subject to the tax. Herriott v. 
Bacon, (1900) 110 Iowa 342; 81 NW. 701, and the same interpretation is 
adhered to in Gilbertson v. McAuley, (1902) 117 Iowa 522; 91 NW. 788. 

Deferred Estates in Real Property—How and When Appraised. 

—Sec. 1481-alO, Supplement, 1913. When any person, whose es¬ 
tate over and above the amount of his debts, as defined in this 
act, exceeds the sum of one thousand dollars, shall bequeath or 
devise any real property to or for the use of persons exempt from 
the tax imposed by this act, during life or for a term of years, 
and the remainder to a collateral heir, said property upon the 
determination of such estate for life or years, shall be appraised 
at its then actual market value from which shall be deducted the 
value of any improvements thereon, or betterments thereto, if any, 
made by the remainder man during the time of the prior estate, 
to be ascertained and determined by the appraisers and the tax 
on the remainder shall be paid by such remainderman as pro¬ 
vided in the next succeeding section. 


106 


COLLATERAL INHERITANCE TAX LAW 


See the preceding section and the notation thereunder. 

The foregoing .section does not state in specific terms the time at 
which the value of the estate is to he determined. For the rule estab¬ 
lished in New York, see the annotations under section 1481-al'6, Supple¬ 
ment, 1913, as it appears in this volume on page 108 hereof. 

Life, Term and Deferred Estates in Real Property—Appraise¬ 
ment—Tax Paid, When. —Sec. 1481-all, Supplement, 1913. 
Whenever any real property of a decedent shall be subject to 
such tax and there be an estate or interest for life or term of years 
given to a party other than those especially exempt by this act, 
the clerk shall cause such property to be appraised at the actual 
market value thereof, as is provided in ordinary cases, and the 
party entitled to such estate or interest shall within one (1) year 
from the death of decedent owner pay such tax, and in default 
thereof the court shall order such interest in said estate, or so 
much thereof as shall be necessary to pay such tax and interest, 
to be sold. Upon the determination of any prior estate or in¬ 
terest, when the remainder or deferred estate or interest or any 
part thereof is subject, to such tax and the tax upon such re¬ 
mainder or deferred interest has not been paid, the person or 
persons entitled to such remainder or deferred interest shall im¬ 
mediately report to the clerk of the proper court the fact of the 
determination of the prior estate, and upon receipt of such report 
or upon information from any source, of the determination of any 
such prior estate when the remainder interest has not been ap¬ 
praised for the purpose of assessing such tax, the clerk shall forth¬ 
with issue a commission to the collateral inheritance tax apprais¬ 
ers, who shall immediately proceed to appraise .the property as 
provided in like cases in the next preceding section, and the tax 
upon such remainder interest shall be paid by the remainderman 
within one (1) 3 r ear next after the determination of the prior es¬ 
tate. If such tax is not paid within said time the court shall then 
order said property, or so much thereof as may be necessary to 
pay such tax and interest, to be sold. 

See the annotations following section 1481-al6, Supplement 1913, on 
page 108 hereof, as to the specific time at which the value of the estate 
is to be determined. 

Note the provisions of the two preceding sections. 

Life, Term and Deferred Estates in Personal Property—Tax 
Paid, When.— Sec. 1481-al2, Supplement, 1913. Whenever any 
personal property shall be subject to the tax imposed by this 
act and there be an estate' or interest for life or term of years 


ASSESSMENT AND COLLECTION 


107 


given to one or more persons and remainder or deferred estate 
to others, the clerk shall cause the property so devised or con¬ 
veyed to be appraised as provided herein in ordinary estates and 
the value of the several estates or interests so devised or conveyed 
shall be determined as provided in section seventeen (17) of this 
act (Sec. 1481-al6, Supplement, 1913, page 108 hereof), and the 
tax upon such estates or interests as are liable for the tax imposed 
by this act shall be paid to the treasurer of state from the prop¬ 
erty appraised or by the persons entitled to such estate or in¬ 
terest within eighteen (18) months from the death of the tes¬ 
tator, grantor, or donor, provided, however, that payment of 
the tax upon any deferred estate or remainder interest may be 
deferred until the determination of the prior state by the giving 
of a good and sufficient bond as provided in the next succeeding 
section. 

See page 106 tor the provisions as to the payment of the tax in case 
an interest is acquired in real property for life or for a term of years. 

Bond to Secure Payment of Tax on Deferred Estates. —Sec. 
1481-al3, Supplement, 1913. When in case of deferred estates or 
remainder interests in personal property or in the proceeds of any 
real estate that may be sold during the time of a life, term or 
prior estate, the persons interested who may desire to defer the 
payment of the tax until the determination of the prior estate, 
shall file with the clerk of the proper district court a bond as 
provided herein in other cases, such bond to be renewed every 
two years until the tax upon such deferred estate is paid. If 
at the end of any two year period the bond is not promptly re¬ 
newed as herein provided and the tax has not been paid, the bond 
shall be declared forfeited, and the amount thereof be forthwith 
collected. When the estate of a decedent consists in part of real 
and in part of personal property, and there be an estate for life 
or for a term of years to one or more persons and a deferred 
or remainder estate to others, and such deferred or remainder 
estate is in whole or in part subject to the tax imposed by this 
act, if the deferred or remainder estates or interests are so dis¬ 
posed that good and sufficient security for the payment of the 
tax for which such deferred or remainder estates may be liable 
can be had because of the lien imposed by this act upon the real 
property of such estate, then payment of the tax upon such 
deferred or remainder estates may be postponed until the de¬ 
termination of the prior estate without giving bond as herein re- 


108 


COLLATERAL INHERITANCE TAX LAW 


quired to secure payment of such tax, and the tax shall remain 
a lien upon such real estate until this tax upon such deferred es¬ 
tate or interest is paid. 

The Condition and the Amount of the Bond—Section 1481-al4, Sup¬ 
plement 1913, page 122 hereof, states that the bond must be equal to 
twice the amount of the tax, interest and costs that may be due from 
the estate, but in no case shall a bond be received for less than $500. 

Value of Annuities, Life, Term or Deferred Estates—How De¬ 
termined. —Sec. 1481-al6, Supplement, 1913. The value of any 
annuity, deferred estate, or interest, or any estate for life or term 
of years, subject to the collateral inheritance tax, shall be de¬ 
termined for the purpose of computing said tax by the rule of 
standards of mortality and of value commonly used in actuaries’ 
combined experience tables as now provided by law. The taxable 
value of annuities, life or term, deferred or future estates, shall 
be computed at the rate of four (4) per cent per annum of the ap¬ 
praised value of the property in which such estate or interest 
exists or is founded. Whenever it is desired to remove the lien 
of the collateral inheritance tax on remainders, reversions, or de¬ 
ferred estates, parties owning the beneficial interest may pay at 
any time the said tax on the present worth of such interests de¬ 
termined according to the rules herein fixed. 

Method of Determining Value of Life Estate—Annuity, etc._There 

has been considerable confusion in estimating the value of a life estate, 
an annuity, etc. Appraisers should read this section with care and 
follow it closely in appraising property passing to such a beneficiary. 

It should be distinctly remembered that the collateral inheritance tax 
appraisers should not appraise the value of the life estate. It is the 
duty of the appraisers to place an estimate upon the value of the property 
which passes to such beneficiary. In estimating this value, the apprais¬ 
ers should not consider the length of time the beneficiary may be al¬ 
lowed to enjoy the property or the income therefrom. The appraisers 
should place a valuation on such property just the same as if it were 
passing in fee to the beneficiary. In making this appraisement, the 
appraisers should follow the same rules and the same procedure as in 
cases where the property passes in fee to the beneficiary. 

When the appraisers have placed a valuation upon the property pass¬ 
ing to another for life, or for a term of years, they should file their 
report with the clerk of the district court. The clerk then sends a cer¬ 
tified copy of this Appraisement Bill to the Treasurer of State. That 
officer then proceeds to estimate the value of the life estate, or annuity, 
by the use of what is ordinarily termed mortality tables. These tables 
are set forth in this compilation and an explanation of their use is also 
given. 


ASSESSMENT AND COLLECTION 


109 


These tables are always used by the Treasurer of State in estimating 
the value of any estate less than in fee. Under the statute the Treasurer 
of State has no authority to consider any facts which would tend to 
increase or diminish the value of the life estate, as for instance, the 
probability that the beneficiary, on account of an incurable disease in 
its last stages, would not live out his expected term. 

The courts are not entirely agreed on this feature but the weight of 
authority is in harmony with the rule followed by our State. Pennsyl¬ 
vania is one of the states holding that evidence of the present health of 
a beneficiary may be taken into consideration in estimating the value of a 
life estate. Re Goldstein, 14 W. M. C. 176 (Pa.); Re Robertson, 5 Dem. 92. 


MASSACHUSETTS. 

This state levies the tax according to the “actuaries combined expe¬ 
rience tables’* regardless of the fact that the estate terminates before 
valuation is made. Howe v. Howe, 179 Mass. 546; 61 NE. 225; 55 L. R. A. 
626. 

NEW YORK. 

The case of Re White, 208 N. Y. 64; 46 L. R. A. (ns) 718; 101 NE. 
793; Ann. Cas. 1914D, 75, clearly presents the rule as to the time when 
the value of the estate is to be determined. In this particular case, Eliz¬ 
abeth White bequeathed the sum of $200,000.00 to a trustee who was to 
pay, after deducting certain expenses, to Gilbert B. Morgan, a grandson, 
the income derived from the trust fund. The testatrix died in March, 
1908. A contest arose over the probating of the will and hence it was 
not admitted to probate until April, 1910. In the meantime, Gilbert B. 
Morgan died in November, 1908, and of course at his death his interest 
in the trust fund terminated. The Court of Appeals held that the 
value of Gilbert B. Morgan’s estate in the trust fund was to be deter¬ 
mined at the value it possessed at the time of the testatrix’s death, re¬ 
gardless of the time when the estate terminated, or that the estate had 
terminated prior to the time an appraisement was made. It should be 
noted in this case, that the grandson never received any benefit from 
the property as he died before the will was admitted to probate, yet the 
tax was assessed. 

The New Ycrk Court stated in part, “The interest of the life beneficiary 
accrued on the death of the testatrix and its. value as to the time of that 
occurrence is the sum to which the rate per centum fixed by the statute 
should be applied, and under the provision within section 222 the tax 
was then due and payable. In as much as it became due and payable at 
the time of the transfer, or at the death of the testatrix, it would seem 
to follow, logically and necessarily that the amount of it should be de¬ 
termined upon the conditions then existing.” 

It will thus be noted that New York bases their estimate of the value 
of a life estate on the expectancy at the time of the death of the tes¬ 
tator regardless of events that may thereafter immediately terminate 
the estate. Again in the estate of Re Jones, 28 Misc. 356; 59 N. Y. Supp. 
983, the statutory method of determining the value of a life estate, by 
the use of mortality tables, was approved although the life tenant died 
before the appraisal. 


110 


COLLATERAL INHERITANCE TAX LAW 


Expectancy or Life Tables—The tables printed herein are those 
adopted, and were used by the United States government in the assess¬ 
ment of the inheritance tax under the War Revenue act of June 13, 1898, 
prepared for the Internal Revenue service under the direction of the 
government actuary, Mr. J. S. McCoy. They are based upon the “Actuar¬ 
ies or Combined Experience Tables,” money being considered worth four 
(4) per cent per annum. 

These tables vary from those used by many insurance companies but 
this difference may be accounted for, for the reason that the tables of 
life insurance companies are many times based upon what is known as 
“selected risks.” That is, upon persons selected as risks on account of 
their good health. Necessarily the “selected risk” tables show a greater 
expectancy than those given herein. 

The tables are as follow's: 


Table No. I. Single-life, 4 per cent, showing the present worth of an 
annuity, or life interest, and of a reversionary interest. 




^ 

^3 



c3 



o 

a 

O o .. Q. 
a gj bfl m 

C Zu-, 

■g n go 

g ce ^ a 

(fj ^ <D o 

, A Q,?. 

% c ^ w 


c 

.2 

r- | 

w- o 

C b£ 
r 7 CD c3 

O rrl 

^ 03^5 

o'S ° «« 

3 u 

-4_> ’ 5^ <4-4 

c ^ Si o 

<D ^ rj 

(/.pH)” 

C n r; ? 

§ 

* S ° 8) 


S 

«*i o s: c: 

u C'3 8 S 


s 

u 3 £.5^ 

c3 «J 


<D 

O 

« o s _ 
Sv'a'V o 

g*3 S'■o'S 

•a <o 

O — < c3 <d 


O -rt 

~ o 

O »—i /*> 

« « 7 o 

£3«*i 3 V £"CS 
o o o O 


c'E 

‘3.3 S ei 2 


G 

’3-2 3 £ 

GJ — ^ C3 cd 


c3 O 

g cj 3 n # 

> s o a 

0) 

c3 a> 

C c3 3 O # 

> cs « a 

b() 

C 

cj 

<5 

a >> a 

<s\ 

O c3 "O <zj 

g 

bO 

< 

<D Cl 

S 

a >t3 >1 a 
■C 

CD r* CCT3 CQ 

g 

0 

23.179 

$14.72829 

$0.39507 

50 

18.113 

$12.47032 

$0.48191 

l 

30.552 

17.30771 

0.29586 

51 

17.527 

12.17919 

0.49311 

2 

35.626 

18.69578 

0.24247 

52 

16.947 

11.88408 

0.50446 

3 

37.572 

19.15901 

0.22465 

53 

16.372 

11.58531 

0.51595 

4 

38.702 

19.41226 

0.21491 

54 

15.804 

11.28325 

0.52757 

5 

39.352 

19.55301 

0.20950 

55 

15.243 

10.99789 

0.53931 

6 

39.654 

19.61731 

0.20703 

56 

14.689 

10.66982 

0.55116 

7 

39.691 

19.62502 

0.20673 

57 

14.143 

10.35931 

0.56310 

8 

39.625 

19.61097 

0.20727 

58 

13.603 

10.04630 

0.57514 

9 

39.264 

19.53413 

0.21022 

59 

13.072 

9.73131 

0.58726 

10 

38.891 

19.45359 

0.21332 

60 

12.549 

9.41474 

0.59943 

11 

38.507 

19.36943 

0.21656 

61 

12.029 

9.09765 

0.61163 

12 

38.113 

19.28184 

0.21993 

62 

11.532 

8.78052 

0.62382 

13 

37.710 

19.19065 

0.22344 

63 

11.039 

8.46412 

0.63600 

14 

37.298 

19.09590 

0.22708 

64 

10.557 

8.14888 

0.64812 

15 

36.877 

18.99764 

0.23086 

65 

10.088 

7.83552 

0.66017 

16 

36.447 

18.89569 

0.23478 

66 

9.630 

7.52476 

0.67212 

17 

36.010 

18.79010 

0.23884 

67 

9.185 

7.21699 

0.68396 

18 

35.565 

18.68070 

0.24305 

68 

8.7!fc> 

6.91298 

0.69565 

19 

35.113 

18.56751 

0.24740 

69 

8.333 

6.61301 

0.70719 

20 

34.652 

18.45038 

0.25191 

70 

7.920 

6.31716 

0.71857 

21 

34.196 

18.32932 

0.25656 

71 

7.532 

6.02612 

0.72976 

22 

33.711 

18.20416 

0.26138 

72 

7.151 

5.74003 

0.74077 

23 

33.230 

18.07471 

0.26686 

73 

6.782 

5.45928 

0.75157 

24 

32.742 

17.94097 

0.27150 

74 

6.425 

5.18402 

0.76215 

25 

32.248 

17.80274 

0.27682 

75 

6.081 

4.91463 

0.77251 

26 

31.747 

17.65984 

0.28231 

76 

5.749 

4.65125 

0.78264 

27 

31.239 

17.51224 

0.28799 

77 

5.428 

4.39383 

0.79254 

28 

30.725 

17.35968 

0.29386 

78 

5.119 

4.14286 

0.80220 

29 

30.205 

17.20225 

0.29991 

79 

4.823 

3.89S58 

0.81159 


(Continued on next page) 






























ASSESSMENT AND COLLECTION 


111 


0> 

iJO 


Cl 

a 

S 

Si 

5-3 

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5 *“• 

CS 0> 

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C3 a) S3 
-*j S3 •-* T3 

ccc't?'^ <u 
(V c ° <y id 

' C ^ CU 

uL«Q 
^ § « a ® 
° °£-C'-S 
a 

■u ® O 

, 3'3 « « 2 

d S 3 4MB 

3 >i a 
<1 


<D 

3 

g S3 

GO ^ 

0) o 
o g, 

C 1 " 

O o 

•a 2 

2 73 
> ? 
<u > 


S3 in 
0J O 

S o 

5 2 

+- a> 


<D 


Ph 


w ^ 60 
■a sj 3 

fl**" T3 
»Oo 

•5+3*3 

c5 o 
•g<2 ^ 

C3 T? CQ 


W) 


a 

S 

CJ 

T3 
O) "o 
(- O 

S' c 

S3 O 
O Q, 
irt 


^3 **; 13 
O O 61! 

. c3 a> ®* 
h c& *+« _- 

4 0 ° S3 «c 
a-rj'rt a! '3 

aa ° tp g- 
. o 0> G w 
°^'§o 

£°+>-g a 

v«S^O 

‘3-3 o 53 2 

c (3 3 s* o 

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c c 
3 fc, 

. 73 g<4- 

•J3 u 9? o 

C 03 ^ ^ 
1111 
?S£&& 

o OTJ C3 - 

-u_ hu-t< 


30 

29.678 

17.03961 

0.30617 

80 

4.537 

3.66071 

0.82074 

31 

29.147 

16.87176 

0.31262 

81 

4.262 

£42900 

0.82965 

32 

28.608 

16.69846 

0.31929 

82 

3.995 

3.20258 

0.83836 

33 

28.067 

16.51964 

0.32617 

88 

3.737 

■2.98024 

0.84691 

34 

27.516 

16.33503 

0.33327 

84 

3.484 

2.76106 

0.85534 

35 

26.961 

16.14487 

0.34060 

85 

3.236 

2.54366 

0.86371 

36 

26.401 

15.94755 

0.34817 

86 

2.992 

2.32795 

0.87200 

37 

25.884 

15,74427 

0.35599 

87 

2.752 

2.11384 

0.88024 

38 

25.263 

15.53421 

0.36407 

88 

2.517 

1.90115 

0.88842 

30 

24.685 

15.31722 

0.37241 

89 

2.286 

1.69107 

0.89650 

40 

24.101 

15.09295 

0.38104 

90 

2.062 

1.48540 

0.90441 

41 

23.511 

14.86102 

0.38996 

91 

1.845 

1.28432 

0.91214 

42 

22.915 

14.62122 

0.39918 

92 

1.637 

1.09024 

0.91961 

43 

22.313 

14.37356 

0.40871 

93 

1.442 

0.90647 

0.92667 

44 

21.708 

14.11860 

0.41852 

94 

1.263 

0.73687 

0.93320 

45 

21.103 

13.85713 

0.42857 

95 

1.108 

0.58435 

0.93906 

46 

20.499 

18.58958 

0.43886 

96 

0.975 

0.46182 

0.94378 

47 

19.896 

13.31698 

0.44935 

97 

O.S77 

0.36698 

0.94742 

48 

19.298 

13.03942 

0.46002 

98 

0.746 

0.24038 

0.95229 

49 

18.703 

12.75716 

0.47088 

99 

0.500 

0.00000 

0.96154 


Explanatory Notes and Examples—The first column shows the age 
of the person under consideration. 

The second column shows the corresponding “mean redemption period” 
and represents the time in years in which the present value of annuities 
and reversions certain will become equal, respectively, to the present 
value of annuities and reversions contingent on the duration of life. The 
“mean redemption period” is ordinarily designated the expectancy of life 
during which a beneficiary will enjoy the life estate. - 

The third column shows the present value of an annuity, for life, of 
one dollar per year, the last payment being made at the end of the year 
prior to the one in which death occurs. 

The fourth column shows the present worth of one dollar payable at 
the end of the year in which death occurs. 

The table appearing on page 113 hereof is to be used in case the 
annuity is for a definite number of years and not based upon the ex¬ 
pectancy of any life, as for instance where the annuity is for a period 
of ten years. 


EXAMPLE NO. 1. 

Suppose a testator bequeathed to his niece the income for life of $10,000, 
the niece being an infant a week old, and you want to ascertain the 
amount of the tax to be paid on this bequest. 

By referring to the first column of the table we find that an infant 
less than one year old is expected to live 23.179 years. Now if $1.00 is 


























112 


COLLATERAL INHERITANCE TAX LAW 


given to the niece at the end of each year of her life, the present worth 
of that annuity of $1.00 will be $14.72829 as shown by the third column 
'of the table. This value is computed on the basis that a dollar will earn 
four cents each year. 

Now the $10,000 at 4% will earn the niece $400 per year. If the 
present annuity value of $1.00 for 23.179 years is $14.72829, then the 
$400 would he worth 400 times the annuity value of $1.00, or $5891.316. 
Supposing the tax rate to he 5%, then the State would levy its 5% tax 
upon the $5891.316, making a tax of $244.56 due the State. 

EXAMPLE NO. 2. 

Now let us suppose a testator bequeathed the income from 75 shares 
of bank stock, 100 shares of stock in the Rock Island Railway Company, 
and the interest received from a $10,000 mortgage to his brother, age 36, 
for life. The appraisers have proceeded to appraise the shares of stock 
as required by law and the Appraisement Bill shows they have valued 
the stock at $14,250, and the mortgage at its face value of $10,000, mak¬ 
ing the total assets of the estate amount to $24,250. Now $24,250 at 4% 
interest would yield an income of $970 per year. At the age of 36, the 
brother would have an expectancy of 26.401 years and the present an¬ 
nuity value of $1.00 for this period would be $15.94755. $970 would be 

worth 970 times the present annuity value of $1.00, or $15,469.12. The 
tax of 5% would be levied upon this sum, thus making $773.45 due the 
State as inheritance tax. 


EXAMPLE NO. 3. 

Let us suppose that in the preceding example that at the brother’s 
death the residue of the estate was to go to other collateral heirs subject 
to the tax. As before pointed out the appraised value of the assets has 
been fixed at $24,250. By referring to our table we find the fourth col¬ 
umn to give us the present or reversionary value of $1.00 when the life 
tenant is 36 years of age and his expectancy is 26.401 years, to be valued 
at .34817, or 34 cents 8 and 17-100 mills. We have here an estate of a 
present value of . $24,250 which will not pass to the residuary heir until 
26.401 years expire. To find the present value of the reversionary estate 
we multiply the value of the estate by the reversionary value of $1.00 
or 24,250 times .34817 which equals $8443.12, on which a tax of 5% will 
be levied by the 1 State, thus making a tax of $422.15. 

EXAMPLE NO. 4. 

Or take another case, suppose a testator gives to his sister a life 
estate in a farm, she being 59 years of age. The farm of 160 acres is 
appraised at $62.50 per acre totaling in value $10,000. This amount at 
4% interest will yield $400 per year. The table informs us that a person 
at 59 years of age is expected to live 13.072 years, and that the present 
annuity value of $1.00 for this period is $9.73131. $400 would be 400 

times the present annuity value of $1.00, or $3892.524 on which a tax 
of 5% would be levied equaling $194.62. 


ASSESSMENT AND COLLECTION 


113 


EXAMPLE NO. 5. 

Suppose a case where the testator directs his: executors to pay to his 
sister the sum of $1,000 per year as long as she lives, she being 65 years 
of age at the time of the testator’s death. Her expectancy would he 
10.088 years. The present annuity value of $1.00 for this period would 
be $7.83552 and $1,000 would be worth 1,000 times that amount, or $7,- 
835.52 on which the State would levy a 5% tax amounting to $391.77. 

Table No. II. Present value of annuities and reversions certain upon 

a 4 per cent basis. 


e 05 

ci u 

d h 5 g 

« 

O a> * £ 

O'O.C «- g 
o 0 * u O 

CD ~ 

w 'i 2 n 


O c3 




1^8 

^ p. d g 

I, 

033 T3 >> 
. a5 O 


X 

S 


rj *2 ^2 <D 

**3 ® «» 2 
O-r 2ug 


o 0 03 b 0 
« 2 £ 

g^cj -3 

5.a >4« B 
ip 3 tj s 3 


P-i 


0>X 

a -e 2 

O 03 C 

>». <u.2 

°:ss 

-e >. o 
g g » 

P o3 00 
C*ta cs3 
c S3 0 o 
0 = -3 >4 
02 O 

o-d S o 



Annuity 

I 

Reversion 


Annuity 

Reversion 

1 

$0.90154 

$0.9615138 

16 

$11.65229 

$0.533908 

2 

1.88609 

0.924556 

17 

12.16567 

0.513373 

3 

2.77509 

0.888996 

18 

12.65929 

0.493628 

4 

3.62989 

0.854804 

19 

13.13394 

0.474642 

5 

4.45182 

0.821927 

20 

13.59032 

0.456387 

6 

5.24214 

0.790314 % 

21 

14.02916 

0.438834 

7 

6.00205 

0.759918 

22 

14.45111 

0.421955 

8 

6.73274 

0.730690 

23 

14.85684 

0.405726 

9 

7.43533 

0.702587 

24 

15.24696 

0.390121 

10 

8.11089 

0.675564 

25 

15.62208 

0.375117 

11 

8.76047 

0.649581 

26 

15.98277 

0.360689 

12 

9.38507 

0.024597 

27 

16.32958 

0.346816 

13 

9.98565 

0.600574 

28 

16.66306 

0.333477 

14 

10.56312 

0.577475 

29 

16.98371' 

0.320651 

15 

11.11839 

0.555265 

30 

17.29203 

0.308319 


This table is to be used only in cases where the length of time in which 
the annuity is to be paid is certain. If the annuity is based upon the 
expectancy of any person then Table No. I should be used in computing 
the value of the estate and the tax thereon. 


EXAMPLE NO. 6. 


Suppose a testator leaves property valued at $50,000, and his niece is 
to have the income from it for 20 years, it then to revert to the testa¬ 
tor’s youngest brother. You want to find the present value of the 
niece’s interest as well as that of the testator’s brother. 

The income from $50,000 at 4% would be $2,000 per year. 

The table informs us that the present worth of an annuity of $1.00 
for 20 years is $13.59032. The present value of an annuity of $2,000 
would be worth 2,000 times the present worth of an annuity of $1.00 for 
20 years, or $27,180.64. The State would levy its tax of 5% on this sum, 
making a total tax of $1,359.03 due the State. 

Now the testator’s brother would be entitled to the $50,000 after the 
8 



















114 


COLLATERAL INHERITANCE TAX LAW 


niece had received the benefit therefrom for 20 years. The third col¬ 
umn informs us that the present worth of a “reversionary” dollar, with¬ 
held for 20 years, is .456387, or 45 cents 6 and 387-1000 mills. In this case 
$50,000 is to revert to the brother, hence it would be 50,000 times .456387, 
or $22,819.35. On this sum the State would levy its 5% tax, amounting 
to $1,140.96. 

EXAMPLE NO. 7. 

Suppose a testator bequeathed to his sister $500.00 per year for 10 
years. You now want the present worth of that annuity. 

Opposite 10 we find the present worth of an annuity of $1.00 for that 
term of years to be $8.11089. $500 would be worth 500 times the value 

of an annuity of $1.00, or $4,055,445; on this sum the State would levy 
its 5% tax, amounting to $202.77. 


EXAMPLE NO. 8. 

Suppose B bequeaths the use of his 320 acre farm to C for a period of 
five years and you want to find the present worth of this bequest for 
the purpose of imposing the inheritance tax. In such cases the land 
must be appraised in the usual manner and we will take it that the 
appraisers have found the land to be worth $130 per acre, making a total 
value of $41,600. This sum at 4% interest would yield an income of 
$1,664 per year. The present worth of an annuity of $1.00 for five years 
we find to be $4.45182. The present worth of an annual income of $1,664 
for five years would be 1,664 times as great as the present worth of an 
annuity of $1.00 or $7,408,028, on which the State would levy its 5% tax, 
amounting to $370.40. 

Contingent Estates, Devises or Legacies. —Sec. 1481-a44, Sup¬ 
plement, 1913. Estates in expectancy which are contingent or de¬ 
feasible and in which proceedings for the determination of the tax 
have not been taken or where the taxation thereof has been held 
in abeyance, shall be appraised at their full, undiminished value 
when the persons entitled thereto shall come into the beneficial 
enjoyment or possession thereof, without diminution for or on 
account of any valuation theretofore made of tlfe particular 
estates for purposes of taxation, upon which said estates in ex¬ 
pectancy may have been limited. When an estate, devise, or 
legacy can be divested by the act or omission of the legatee or 
devisee, it shall be taxed as if there were no possibility of such 
divesting. When a devise, bequest or transfer is one in part 
contingent, and in part vested so that the beneficiary will come 
into possession and enjoyment of a portion of his inheritance on 
or before the happening of the event upon which the possible de¬ 
feating contingency is based, a tax shall be imposed and collected 
upon such bequest or transfer as upon a vested interest, at the 


ASSESSMENT AND COLLECTION 


115 


highest rate possible under the terms of this act if no such con¬ 
tingency existed; provided, that in the event such contingency 
reduces the value of the estate or interest so taxed, and the 
amount of tax so paid is in excess of the tax for which such be¬ 
quest or transfer is liable upon the removal of such contingency, 
such excess shall be refunded as is provided in section forty-four 
(44) (Sec. 1481-a43, Supplement, 1913, page 101 hereof) of this 
act in other cases. 

For the rule to be used in determining the exact time when the value 
of an estate is to be determined, see the annotations following sec. 1481- 
al6, Supplement, 1913, appearing on page 108 hereof. 

The supreme court of Iowa thus far has had no occasion to pass upon 
the foregoing section. The Treasurer of State in view of the statute has 
followed the rule as recognized in Minnesota. (See the following cita¬ 
tion) : 

MINNESOTA. 

It has been held under the Minnesota statutes that if the tax rate 
cannot be definitely determined at the time of the transfer of property, 
the tax should be paid at the highest rate to which it in any event would 
be subject, and if it eventually transpires that a lower rate should have 
been levied, a refund may be ordered. State v. Probate Court, ... Minn. 

. ..; 162 NW. 459. 

Proofs Furnished Treasurer of State on Demand.—Sec. 1481- 
a24, Supplement, 1913, as amended by 35 G. A. chap. 121. Before 
issuing his receipt for the tax, the treasurer of state may demand 
from administrators, executors, trustees or beneficiaries such in¬ 
formation as may be necessary to verify the correctness of the 
amount of the tax and interest, and when such demand is made 
they shall send to said treasurer certified copies of wills, deeds, 
or other papers, or of such parts of their reports as he may de¬ 
mand, and upon the refusal or neglect of said parties to comply 
with the demand of the treasurer of state, it is the duty of the 
clerk of the court to comply with such demand, and the ex¬ 
penses of making such copies and transcripts shall be charged 
against the estate, as are other costs in probate, or the tax may 
be assessed without deducting debts for which the estate may be 
liable, ( # ) and upon payment of such tax the treasurer of state 
shall forthwith transmit a duplicate receipt, to the clerk of the 
court of the county in which the estate is being settled, showing 
the payment of such tax. (*) 


(*) Added by 35 G. A. chap. 121. 



116 


COLLATERAL INHERITANCE TAX LAW 


The Treasurer of State requires that the following form be used in 
reporting the Assets and Liabilities of each domestic estate before is¬ 
suing his receipt- These forms may be secured from the Treasurer of 
State upon request. Follow the instructions given on the form with care. 

Form No. 23. 

REPORT TO THE TREASURER OF STATE OF IOWA OF ASSETS 

AND LIABILITIES 

To the Treasurer of State, Des Moines, Iowa: 


The Estate of. late of. 

County, State of .. is subject, as hereinafter shown. 


to the tax assessed against collateral inheritances by the State of Iowa. 
The benficiaries of the estate, the nature and amount of the property 
comprising the estate subject to said tax, the debts owing by the decedent 
at the time of his death, and the expenses incident to the administration 
and settlement of the estate are fully set out below: 

The decedent owner died on the.day of.. 19.. 

and .qualified as . on the. 

day of.19.. 

The beneficiaries of the estate are the following: (See Instruction 
No. 1.) 

Approximate 

Name Relation Address Amount Due 

Beneficiary 


V/hen an estate is liable for the tax ONLY upon certain legacies or 
specific bequests, the amount of which and the tax thereon are deter¬ 
minable without regard to the balance of the estate devised or passing 
to persons exempt, the executor or administrator, if he is willing to 
charge himself with the tax on the full amount of the legacies, need not 
make returns as to the real and personal property and the debts of the 
estate. This rule does not apply when the “residue” is to be divided 
between direct and collateral heirs. 

ASSETS 

The estate consisted of the following classes of property, the values 
thereof appraised or otherwise determined as provided by the inherit¬ 
ance tax law, being as shown below: (Real property subject to a mort¬ 
gage is to be appraised at its value less the mortgage, or in other words 
it is only the equity or redemption that is to be appraised.) 































ASSESSMENT AND COLLECTION 


117 


REAL PROPERTY 


LANDS AND LOTS 
(See Instruction No. 2) 

County 

Sec. 

Twp. 

Rng. 

Lot 

Block 

Value 


















Total Value of Real Property (after deducting mortgage 
Indebtedness) . $ 

PERSONAL PROPERTY 


Cash . $ 

Money on deposit . $ 

Book accounts . $ 


Securities— 

Bank stock (including dividends and profits accrued at 

time of death) .$. 

Corporation stock (including dividends and profits ac- * 

crued at time of death) .$. 

Bonds (including interest accrued at time of 

death) .$. 

Mortgages (including interest accrued at time of 

death) .$. 

Notes (including interest accrued at time of 

death) .$. 

To^il securities . $ 

Live Stock— 


Horses .? 

Mules .$ 

Cattle .$ 

Swine .$ 

Sheep .$ 

Other stock.? 


Total live stock ... 

Grain in storage . 

Hay and other crops .. 
Household furniture .. 
Miscellaneous property 


Property brought within the state for distribution. $ 

Total personal property . ? 

Total value of entire assets of estate. $ 


































































118 COLLATERAL INHERITANCE TAX LAW 

LIABILITIES 

The debts owing by the decedent at his death and the expense of ad¬ 
ministration in probate payable out of the estate as provided by law, are 
given in detail as follows: (Do not include indebtedness secured by a 
mortgage on real property as a debt in listing the liabilities. The mort¬ 
gage indebtedness is deducted in appraising the value of the real prop¬ 
erty.) 

State and local taxes due January 1, 19.., and unpaid at 

date of death (See Instruction No. 3.). $. 

Chattel mortgage indebtedness (owing at time of death) $. 

Notes (owing at time of death) . $. 

Medical attendance . $. 

Funeral expenses . $. 

Monument and grave, etc. $. 

Court costs . $. 

Appraiser’s fees (See Instruction No. 4). $. 

Executor’s or Administrator’s Statutory fees (See In¬ 
struction No. 5). $. 

The amount paid for the executor’s bond . $. 

The attorney’s fees in ordinary probate proceedings_ $. 

Miscellaneous debts and claims (due prior to death) 

(Specify) . $. 

... $ . 

. $ . 

. $ . • 

... $ . 

.. $ . 

. $. 

. $. 

. $ . 

. $. 

Total miscellaneous debts . $. 

Total liabilities .$. 

(Do not include indebtedness secured by mortgage on real property) 

STATE OF IOWA, ) 

V SS. 

.County ) 















































ASSESSMENT AND COLLECTION 


119 


., do solemnly swear that the above and 

foregoing statements of assets and liabilities of the estate of. 

. are true and correct as I verily believe. 


Subscribed 


19.... 


and sworn to before me, and in my presence, by said 
. on this.day of.. 


Notary Public in and for.County. 

RECAPITULATION 

Real property. $. 

Personal property . $. 

Total assets . $. 

Total liabilities . $. 

Net estate, after deducting debts, as provided by law. $.. 

Property exempt (to direct heirs; religious, charitable or 
educational institutions in Iowa) . $. 


Property subject to tax. $. 

Tax due . $. 

Interest on delinquent tax .. $. 

TOTAL TAX DUE ON THE.DAY OF 

.19. $. 


INSTRUCTIONS 

No. 1. It is absolutely necessary that the name, relationship and address 
of each beneficiary be given. 

No. 2 If any of the land is encumbered by a mortgage or other lien, state 
the amount of such encumbrance following the description of 
the land. 

No. 3. Only state and local taxes due and payable on January 1st of 
the year of the decedent’s death are to be deducted. Taxes due 
the United States as Income Tax or Inheritance Tax are not to 
be deducted, nor is inheritance tax paid in other states to be 
deducted. 

No. 4. Appraisers’ fees are fixed by law at $3.00 per day and five cents 
per mile for each mile traveled going and coming. Sec. 1290-a, 
Supplemental Supplement, 1915. 

No. 5. Only such fees as an Executor, or Administrator, is entitled to 
by law are to be deducted. Sec. 3415 of the Code. 

No. 6. When complete send this report to the Treasurer of State, Des 
Moines, Iowa. 

































120 


COLLATERAL INHERITANCE TAX LAW 


No Final Settlement With Any Executor or Trustee to be Ap¬ 
proved Until Tax Paid.—Sec. 1480 of the Code. No final settle¬ 
ment of the account of any executor, administrator or trustee 
shall be accepted or allowed unless it shall show, and the court 
shall find, that all taxes imposed by the provisions of this chap¬ 
ter upon any property or interest therein belonging to the estate 
to be paid by such executors, administrators or trustees, and to be 
settled by said account, shall have been paid, and the receipt of 
the treasurer of state for such tax shall be the proper voucher 
for such payment. 

See the following section and the notations thereunder, as it should 
prevail in case of a conflict with the above section of the Code, having 
been enacted at a later date. 

Settlement with Executors, etc., Void if Taxes Are Not Paid.— 

Sec. 1481-al9, Supplement, 1913. No final settlement of the ac¬ 
count of any executor, administrator, or trustee shall be accepted 
or allowed unless it shall show, and the court shall find, that all 
taxes imposed by the provisions of this act upon any property 
or interest therein, that is hereby made payable by such execu¬ 
tors, administrators or trustees, and to be settled by said account, 
shall have.been paid, and the receipt of the treasurer of state for 
such tax shall be the proper voucher for such payment. Any 
order contravening the provision of this section shall be void. 
Upon the filing of such receipt showing payment of the tax, 
the clerk shall record the same upon the collateral inheritance 
tax lien book in his office. 

See the preceding section. 

In the case of Ryan v. Hutchinson, Judge (1913) 161 Iowa 575, 143 
NW. 439, the Treasurer of State filed an objection to the final report of 
the executor of the estate of Patrick F. Ryan, which was sustained by 
the court. Time was granted the plaintiff in which to file a bill of ex¬ 
ceptions to the ruling but no bill was filed. Instead, the plaintiff sued 
out a writ of certiorari, claiming that the district court was without 
jurisdiction to hear the objections made by the Treasurer of State. It 
was held by the supreme court that certiorari will not lie unless the 
inferior tribunal had action without jurisdiction or illegally, and there 
is no other plain, speedy and adequate remedy. Errors that are not 
illegal or void for want of jurisdiction must be cured by a proper appeal 
and not by certiorari. 

Binding Effect of Discharge of Administrator by a Court of One State 
Upon Another State—The fact that a decree may have been entered in 
another state finding that all claims presented against the estate have 
been paid, including taxes and inheritance taxes and ordering that the 


ASSESSMENT AND COLLECTION 


121 


administrator and his sureties be relieved of any obligations thereafter 
incurred will not prevent another state from insisting upon the payment 
of the inheritance tax in its jurisdiction provided such decree may be 
lawfully set aside in the state in which it is rendered on a proper show¬ 
ing. 

If such decree or judgment cannot be set aside in the state where 
rendered it cannot be attacked elsewhere under the provision of the 
Constitution of the United States whereby each state is bound to give full 
faith and credit to the judgments of the courts of other states of the 
Union. U. S. Const. Art. 4, Sec. 1; Fred Miller Brewing Co. v. Capital 
Ins. Co., (1900) 111 Iowa 590; 82 NW. 1023; 82 Am. St. Rep. 529. 

ILLINOIS. 

Thus, where a court in California discharged an administrator under 
a decree, as stated above, which was binding only on “heirs, legatees, or 
devisees” and which could have been set aside by the courts of that state, 
it was held that it did not prevent the State of Illinois from thereafter 
assessing its inheritance tax on the same property, when later brought 
within the State of Illinois. People v. Union Trust Co., 255 Ill. 168; 99 
NE. 377; L. R. A. 1915D, 450. 

UNITED STATES. 

For a case where the State of New York was held to be barred from 
collecting its inheritance tax after discharge of an executor by a court in 
the State of New Jersey, see Tilt v. Kelsey, 207 U. S. 43; 52 L. Ed. 95; 
28 Sup. Ct. Rep. 1. It was there held that on the record presented, the 
decree of the New Jersey court was a final bar to all claims as against 
the estate and against the executors and distributees of the property. 

Effect of Discharge of Administrator Before Payment of Tax—The 
foregoing sections provide that failure to pay the tax required by law 
renders void any discharge of an administrator by a court. It is no pro¬ 
tection to the administrator to plead such release, nor could his bondsman 
do so as the statute affirmatively provides the discharge is void. The 
beneficiary who receives property from an estate without paying the in¬ 
heritance tax thereon takes such property subject to the lien of the tax, 
interest and other penalties of the law. And furthermore such person is 
personally liable for the tax. See secs. 1481-al7 and 28, Supplement, 1913, 
pages 83 and 53 of this volume. 

It has frequently been held that the failure of an administrator to pay 
the tax will not relieve him from liability even though he had, in good 
faith filed his reports and been discharged thereunder by order of court. 

CALIFORNIA. 

Re Lander, (1907) 6 Cal. App. 744; 93 Pac. 202. 

MASSACHUSETTS. 

Attorney General v. Rafferty, (1911) 209 Mass. 321; 95 NE. 747. 


122 


COLLATERAL INHERITANCE TAX LAW 


NEW YORK. 

Re Hacket, (1895) 14 Misc. 282; 35 N. Y. Sup. 1051. Re Hubbard, 
(1897) 21 Misc. 566; 48 N. Y. Sup. 869- 

While the general rule is that an executor who is discharged by order 
of the court without having paid the inheritance tax is personally liable 
therefor, yet where the estate shrinks through the destruction of the 
property or the assets are obliterated of all value during the process of 
administration, without fault or delinquency on the part of the executor, 
he is entitled to be discharged even though the tax has not been paid 
where the assets of the estate are insufficient to meet the costs of ad' 
ministration. For a case on this point, see Re Meyer, 209 N. Y. 386; 103 
N. E. 713; L. Rt A. 1915C, 615. 

Bonds—Conditions of—Amount.—Sec. 1481-al4, Supplement, 
1913. All bonds required by this act shall be payable to the treas¬ 
urer of state and shall be conditioned upon the payment of the 
tax, interest and costs for which the estate may be liable, and for 
the faithful performance of all the duties hereby imposed upon 
and required of the person whose acts are by such bond to be 
guaranteed, and shall be in an amount equal to twice the amount 
of the tax' interest and costs that may be due, but in no case less 
than five hundred dollars ($500.00) and must be secured by not 
less than two resident freeholders or by a fidelity or surety com¬ 
pany authorized by the auditor of state to do business in this 
state. 

See page 53 hereof. 

The 35th G. A. created the office of Commissioner of Insurance and 
bestowed all power theretofore existing in the Auditor of State, in rela¬ 
tion to insurance, upon the Commissioner of Insurance. Sec. 1683-r3, 
Supplement, 1913. 

Removal of Taxable Property from State—Penalty.—Sec. 1481- 
al5, Supplement, 1913. It shall be unlawful for any person to 
remove from this state any property, or the proceeds thereof, 
that may be subject to the tax imposed by this act, without pay¬ 
ing the said tax to the treasurer of state. Any person violating 
the provisions of this section shall be guilty of a felony and upon 
conviction shall be fined an amount equal to twice the amount of 
tax, interest and costs for which the estate may be liable, but in 
no case less than two hundred dollars ($200.00) and imprisoned 
as the court shall direct, until the fine is paid. Provided, how¬ 
ever, that the penalty hereby imposed shall not be enforced, if 
prior to the removal of such property or the proceeds thereof, the 


ASSESSMENT AND COLLECTION 


123 


person desiring to effect such removal files with the clerk a bond 
conditioned upon the payment of the tax, interest and costs, as 
is provided in the preceding section hereof. 

If two or more persons conspire together to remove property from the 
State of Iowa in order to avoid taxation they may he convicted of con¬ 
spiracy and be imprisoned in the penitentiary for not more than three 
years. Sec. 5059 of the Code. 

Duties of County Attorney—Compensation—Another Attorney 
Employed, When. Sec. 1481-a32, Supplement, 1913. It shall be 
the duty of the county attorney of each county, when directed by 
the treasurer of state, to perform such legal services as shall be 
necessary in the enforcement of said tax, but such attorney shall 
have no authority to receipt for or receive any of such tax. He 
shall advise and assist the clerk and appraisers in the discharge 
of their duties in collateral inheritance tax matters, and see that 
the notices required by law are properly made and returned. In 
each estate where the county attorney has performed such legal 
services, he shall receive a compensation as follows, viz.: on the 
first one hundred dollars ($100.00) or fraction thereof of tax 
paid, ten per cent; on the excess of one hundred dollars ($100.00) 
to five hundred dollars ($500.00) five per cent; on the excess of 
five hundred dollars ($500.00) to one thousand dollars ($1,000.00) 
three per cent; on all sums in excess of one thousand dollars 
($1,000.00) one per cent but not to exceed one hundred and fifty 
dollars ($150.00) from any one estate. Provided, however, that 
except in cases of litigation requiring the filing of a petition 
or answer in court, the fee in any case shall not exceed the sum 
of fifty dollars ($50.00). When the treasurer of state has issued 
his receipt for the tax in an estate, in which the county attorney 
has been directed to render legal services, and has performed such 
services, the treasurer of state shall certify the amount due for 
such services to the auditor of state, who shall issue his warrant 
on the treasurer of state in favor of the said county attorney for 
the sum due. If the county attorney is attorney for the executor, 
administrator or other person interested in the estate, the treas¬ 
urer of state may employ another attorney, to represent the state. 

For wilful or habitual neglect or refusal to perform the duties of his 
office, a county attorney may be removed from office by the district court 
or judge under the provisions of sec. 1258-a, Supplement, 1913, as amended 
by 37th G. A. chap. 391. 


124 


COLLATERAL INHERITANCE TAX LAW 


Conflicting- Claims for Attorney Fees—How Settled. —Sec. 1481- 
a33, Supplement, 1913. In the event of uncertainty or of con¬ 
flicting claims as to fees due county attorneys or clerks under this 
act, the treasurer of state is empowered to determine the amount 
of fees, to whom payable, and when the same are due, and as far 
as possible, such determination shall be in accord with fixed 
rules made by the treasurer of state. 

District Court to Enforce Payment of Tax. —Sec. 1481-a34, Sup¬ 
plement, 1913. On the first day of each regular term, the court 
shall require the clerk to present for its inspection the inheritance 
tax and lien book hereinbefore provided for, together with all 
reports of administrators, executors and trustees which have 
been filed pursuant to this act, since the last preceding term. The 
county attorney shall also attend and make report to the court 
concerning the progress of all cases pending for the collection 
of such taxes, together with any other facts, which in his judg¬ 
ment may aid the court in enforcing the general observance of 
the collateral inheritance tax law. If from information obtained 
from the records or reports, or from any other source, the court 
has reason to believe that there is property within its jurisdiction 
liable to the payment of an inheritance tax, against which pro¬ 
ceedings for collection are not already pending, it shall enter 
an order of record, directing the county attorney to institute such 
proceedings forthwith. Should any estate, or the name of any 
grantee or grantees be placed upon the book at the suggestion of 
the county attorney, the treasurer of state, or other person, in 
which the papers already on file in the clerk’s office do not dis¬ 
close that an inheritance tax is due or payable, the county attor¬ 
ney shall forthwith give to all parties in interest such notice as the 
court or judge may prescribe, requiring them to appear on a 
da}’ to be fixed by the said court or judge, and show cause why 
the property should not be appraised and subjected to said tax.. 
At any such hearing any person may be required to appear and 
answer as to his knowledge of any such estate or property. -If 
upon any such hearing the court is satisfied that any property 
of the decedent or any property devised, granted or donated by 
him, is subject to the tax, the same proceedings shall be had as 
in other cases, so far as applicable. 

Costs Taxed to Estate.— Sec. 1481-a35, Supplement, 1913. In all 
cases where an estate or interest therein so passes as to be liable 


ASSESSMENT AND COLLECTION 


125 


to taxation under this act, all costs of the proceedings had for 
the assessment of such tax shall be chargeable to such estate as 
other costs in probate proceedings and to discharge the lien, all 
costs, as well as the taxes must be paid. In all other cases the 
costs are to be paid as ordered by the court. When a decision 
adverse to the state has been rendered, with an order that the 
state pay the costs, it shall be the duty of the clerk of the court 
in which such action was pending to certify the amount of such 
costs to the treasurer of state, who shall, if said costs be cor¬ 
rectly certified, and the case has been finally terminated, and the 
tax if any due has been paid, present the claim to the executive 
council to audit, and said claim being allowed by said council, 
the auditor of state is directed to issue a warrant on the treasurer 
of state in payment of such costs. 

See the annotation under the heading of “debts” page 48 hereof. 

Jurisdiction of Court as to Matters Relating to Collateral In¬ 
heritance—Treasurer of State to be Plaintiff. —Sec. 1481 of the 
Code. The district court having either principal or ancillary jur¬ 
isdiction of the settlement of the estate of the decedent shall have 
jurisdiction to hear and determine all questions in relation to said 
tax that may arise affecting any devise, legacy or inheritance, or 
any grant or gift, under this chapter, subject to appeal as in 
other cases, and the treasurer of state shall in his name of office 
represent the interests of the state in any such proceeding. 

See the following section which should prevail in case of a conflict as 
it was enacted after the passage of the section of the Code above quoted. 

The supreme court had occasion to consider this section of the Code 
in the case of Re Culver’s Estate, (1911) 153 Iowa 461-467; 133 NW. 722, 
wherein it was said: “From this it appears that the proceedings, while 
special, are at law, and not equitable in character; and that the rules ap¬ 
plicable to appeals in law cases must govern.” 

Jurisdiction —Sec. 1481-a20, Supplement, 1913. The district 
court in the county in which some part of the property is sit¬ 
uated, of the decedent who was not a resident, or such court in 
the county of which the deceased was a resident at the time of his 
death or where such estate is administered, shall have jurisdiction 
to hear and determine all questions regularly brought before it 
in relation to said tax that may arise affecting any devise, legacy, 
annuity, transfer, grant, gift -or inheritance, subject to appeal 
as in other cases, and the treasurer of state shall in his name 
of office, with all the rights and privileges of a party in interest, 
represent the state in any such proceedings. 


126 


COLLATERAL INHERITANCE TAX LAW 


See the preceding section and the notation thereunder. 

Appellate Procedure—Matters relating to the imposition and collec¬ 
tion of the collateral inheritance tax are to be tried on appeal as an 
action at law and not as in equity. Lamb v. Morrow, (1908) 140 Iowa 
89-94; 117 NW. 1118; 18 L. R. A. (ns) 226. Such cases are not triable 
de novo in the supreme court, but must be upon exceptions duly taken 
before the trial court, and this is true although the matter could not have 
been submitted to a jury in the first instance. The proceedings are at 
law and are reviewable as such. Gould v. Morrow, (1911) 153 Iowa 461- 
469; 133 NW. 722. Cited with approval in Klopp v. C., M. & St. Paul Ry. 
Co., (1912) 156 Iowa 466-469; 136 NW. 906. 

Construction. —Sec. 1481-a45, Supplement, 1913. In the con¬ 
struction of this act, the words “collateral heirs” shall be held 
to mean all persons who are not specifically exempt from the 
tax imposed by the provisions hereof. The word “person” shall 
include a plural as well as singular, and artificial as well as nat¬ 
ural persons. This act shall not be construed to confer upon a 
county attorney authority to represent the state in any case, and 
he shall represent the treasurer of state only when especially 
authorized by him to do so. This act shall apply to all estates 
subject to taxation under the law repealed by this act if the tax 
for which such estates are liable shall not have been paid prior 
to the taking effect of this act. 

“It is to be inferred that a code of statutes relating to one subject was 
governed by one spirit and policy, and was intended to be consistent and 
harmonious in its several parts and provisions.” Herriott v. Bacon, (1900) 
110 Iowa 342; 81 NW. 701. This decision was rendered prior to enact¬ 
ment of foregoing statute. 

Repeal.—Sec. 1481-a47, Supplement, 1913. Chapter four (4), 
of title seven (7), of the supplement to the code, 1907, and chapter 
ninety-two (92) of the acts of the thirty-third (33) general as¬ 
sembly, and all other acts or parts of acts in conflict herewith, 
are hereby repealed. 


CHAPTER V 


TREATIES WITH FOREIGN NATIONS—EFFECT ON IOWA 
LAW RELATING TO INHERITANCE TAX. 

Treaties—Who Has Authority to Make or Change—This question of 
Treaties and Treaty Making Power is entirely too broad to be considered 
fully in a work of this character, hence, nothing more than a general 
statement of a few important principles is given, and only such matters 
are discussed as will be useful in properly understanding our treaties in 
relation to inheritance taxation. 

So far as this nation is concerned all our treaties are made by the 
federal government. The various states have delegated that power to 
the United States by providing in the constitution that the president of 
the United States “shall have power, by and with the advice and consent 
of the senate, to make treaties provided two-thirds of the senators pres¬ 
ent concur.” Art. II, sec. 2, par. 2- 

It will therefore be noted that the individual states have no treaty 
making power. 

The federal constitution provides that the “constitution, and.the laws 
of the United States which shall be made in pursuance thereof, and all 
treaties made, or which shall be made, under the authority of the United 
States, shall be the supreme law of the land; and the judges in every state 
shall be bound thereby, anything in the constitution or laws of any state 
to the contrary notwithstanding.” Art. VI, par. 3. 

Any nation making a treaty with this nation must take notice of the 
limitation upon the treaty making power of the President, who is aided 
by the Senate. There are certain rights fixed by the constitution of the 
United States which cannot be changed or modified by any treaty. Among 
these rights are a trial by a jury in all criminal prosecutions, and that a 
person cannot be compelled to be a witness against himself, etc. Further¬ 
more, no agreement entered into is valid without the consent of the Senate. 

The wisdom of our forefathers in thus protecting and limiting the 
treaty making power of our government cannot be more clearly shown 
than by pointing to the method of treaty-making ordinarily followed in 
Europe. The late Czar of Russia had absolute power in the matter of 
making treaties and could provide in such an agreement that subjects of 
Russia were to be denied all the rights of citizenship without reserva¬ 
tion; he could enter into a secret treaty and thus barter and sell his sub¬ 
jects and their belongings as if they were mere chattels. The power of 
the emperor of Germany is far beyond that granted our president but 
not as absolute as that of the ex-Czar. 

It sometimes happens that the provisions of a treaty conflict with the 
provisions of an act of Congress which is passed after the treaty has been 
ratified. For discussion of such cases, see page 128 hereof. 


i 


128 


COLLATERAL INHERITANCE TAX LAW 


Form of Treaties—Language in Which Written—In the case ot 
formal treaties it is customary to make, sign and seal a duplicate treaty 
for each of the contracting powers. In event the contracting powers have 
no common language, the treaty is usually made out in the language of 
both, often the text appearing in parallel columns or on opposite pages. 
Where there are several contracting powers having various languages the 
treaty is often drawn up in one language. In Europe it is the custom to 
use the French language for this purpose. See Crandall’s “Treaties, Their 
the French language for this purpose. See Crandall s “Treaties, Their 
Making and Enforcement,” sec. 6. 

In Re Estate of Peterson, (1915) 168 Iowa 511; 151 NW. 66, the mean¬ 
ing of the words “goods and effects” in the treaty between the United 
States and Sweden was determined by the French meaning of the term, 
since the treaty was written in French. 

Definition of Terms—There are terms of international law appear¬ 
ing in several of the treaties which have a definite legal meaning and 
are to be thus considered in construing treaties where the terms appear. 
The terms are as follows: 

“Ah intestato” means from an intestate, or from one who dies without 
having made a will. In Re Estate of Peterson, (1915) 168 Iowa 511; 
151 NW. 66; affirmed by U. S. Supreme Court (1917), 38 Sup. Ct. Rep. 
Ill; 245 U. S. ...; 62 L. Ed. 144. 

“Droit d'aiibaine ,” a right recognized by an old French law whereby 
“all the property of a deceased foreigner, whether movable, or immovable, 
was confiscated to the use of the state, to the exclusion of his heirs, 
whether claiming ah intestato or under a will of the deceased.” Opel v. 
Shoup, (1896) 100 Iowa 407, 69 NW. 560; 37 L. R. A. 583. 

“Droit de detraction ” means a right to levy a tax upon the removal 
from one state or country to another of property acquired by succession 
or testamentary disposition; however it does not cover taxes upon the 
succession to or transfer of property. In Re Estate of Peterson, supra. 

“Goods and effects ” has been held to include real property as well as 
personal property in several cases. Adams v. Akerlund, 168 Ill. 632; 48 
NE. 454; Re Stixrud, 58 Wash. 339; 109 Pac- 343; 33 L. R. A. (ns) 632; 
Ann. Cas. 1912A, 850. A contra view expressed in Meier v. Lee, (1898) 
106 Iowa 303; 76 NW. 712, but the soundness of the holding is questioned 
by inference in Re Estate of Anderson, (1914) 166 Iowa 621; 147 NW. 
1098. However, where the original treaty is written in the French lan¬ 
guage the term “goods and effects ” should be construed to include real 
property as the term used in that language cover it. Re Estate of 
Peterson, supra. 

Construction—Conflict Between Treaty and Federal Statute—The 
Supreme Court of the United States in Geofroy v. Riggs, 133 U. S. 258, 
at 271; 10 Sup. Ct. 295, 298; 33 L. Ed. 642, held that “treaties are to be 
liberally construed, so as to carry out the apparent intention of the 
parties to secure an equality and reciprocity between them. As they are 
contracts between independent nations, in their construction words are 
to be taken in their ordinary meaning, as understood in the public law of 
nations, and not in any artificial, or special sense impressed upon them 
by local law, unless such restricted sense is clearly intended. And it has 


TREATIES WITH FOREIGN NATIONS 


129 


been held by this court that where a treaty admits of two constructions, 
one restrictive of rights that may be claimed under it and the other fa¬ 
vorable to them, the latter is to be preferred.'’ 

The following rule has been held to apply when an act of Congress is 
claimed to repeal a provision of a prior treaty as well as when two stat¬ 
utes conflict. United States v. Lee Yen Tai, 185 U. S. 213, at pages 221 
and 222. 

“In the case of statutes alleged to be inconsistent with each other in 
■whole Or in part, the rule is well established that effect must be given 
to both, if by any reasonable interpretation that can be done; that there 
must be a positive repugnancy between the provisions of the new laws 
and those of the old; and even then the old law is repealed by implication 
only pro tanto, to the extent of the repugnancy,” and that “if harmony 
is impossible, and only in that event, the former is repealed in part or 
■wholly, as the case may be.’ Wood v. United States, 16 Pet. 342; United 
States v. Tynen, 11 Wall. 88; State v. Stall, 17 Wall. 425; Frost v. Wenie, 
157 U. S. 46. 

In the event that the state statute conflicts with a treaty, the latter 
will prevail. See page 41 hereof for a discussion of this matter and for 
citation of cases. 

Ho tline of the Case of Frederickson v. Louisiana—In this crse.the 
Supreme Court of the United States announced a doctrine that has been 
repeatedly followed by the courts of the Union in dealing with treaties. A 
brief statement of the facts of the case are necessary to understand the 
import of the doctrine. 

A naturalized citizen 'of the United States by the name of John David 
Fink, residing at New Orleans at the time of his death, had bequeathed 
his property in favor of beneficiaries residing in the kingdom of Wurtem- 
berg and subjects thereof. 

The claim of the state of Louisiana for an inheritance tax “was re¬ 
sisted in the District Court, on the ground that it is contrary to the pro¬ 
visions of the third article of the convention between the United States 
of America and his majesty the king of Wurtemberg, of the 10th April, 
1844. That article is, that ‘The citizens or subjects of each of the con¬ 
tracting parties shall have power to dispose of their personal property 
within the states of the other, by testament, donation, or otherwise; and 
their heirs, legatees, and donees, being citizens or subjects of the other 
contracting party shall succeed to their said personal property, and may 
take possession thereof, either by themselves, or by others acting for 
them, and dispose of the same at their pleasure, paying such duties only 
as the inhabitants of the country where the said property- lies shall be 
liable to pay in like cases.’ This court, in Mager v, Grima, 8 How. S. C. 
R., 490, decided that the act of the legislature of Louisiana was nothing 
more than the exercise of the power which every state or sovereignty pos¬ 
sesses of regulating the manner and terms upon which property, real and 
personal, within its dominion, may be transmitted by last wdll and tes¬ 
tament, or by inheritance, and of prescribing who shall and who shall not 
be capable of taking it. The case before the district court in Louisiana 
y ► 


130 


COLLATERAL INHERITANCE TAX LAW 


concerned the distribution of the succession of a citizen of that state, 
and of property situated there. The act of the legislature under review 
does not make any discrimination between citizens of the state and aliens 
in the same circumstances. A citizen of Louisiana domiciliated abroad is 
subject to this tax. The State v. Poydras, 9 La. Ann. R., 165; therefore, if 
this article of the treaty comprised the succession of a citizen of Louisi¬ 
ana, the complaint of the foreign legatees would not be justified. They 
are subject to ‘only such duties as are exacted from citizens of Louisiana 
under the same circumstances.’ But we concur with the supreme court 
of Louisiana in the opinion that the treaty does not regulate the testa¬ 
mentary dispositions of citizens or subjects of the contracting powers, in 
reference to property within the country of their origin or citizenship. 
The cause of the treaty was, that the citizens and subjects of each of the 
contracting powers were or might be subject to onerous taxes upon prop¬ 
erty possessed by them within the states of the other, by reason of their 
alienage, and its purpose was to enable such persons to dispose of their 
property, paying such duties only as the inhabitants of the country where 
the property lies, pay under like conditions. The case of a citizen or 
subject of the respective countries residing at home, and disposing of 
property there in favor of a citizen or subject of the other was not ini 
the contemplation of the contracting powers , and is not embraced in this 
article of the treaty. This view of the treaty disposes of this cause upon 
the grounds on which it was determined in the supreme court of Louis¬ 
iana.” 64 U. S. (23 How.) 445; 16 L. Ed. 577. 

Among the Iowa cases following the doctrine of Frederickson v. Louis¬ 
iana, supra , are In Re Estate of Anderson, 166 Iowa 617; 147 NW. 1098, 
cited at page 140 hereof, also the Estate of Peterson, 168 Iowa 511; 151 
NW. 66; L. R. A. 1916A, 469, affirmed by the Supreme Court of the United 
States in 38 Sup. Ct. Rep. Ill; 245 U. S. ...; 62 L. Ed. 144. 

The courts have been consistent in following the doctrine an¬ 
nounced in the Frederickson case as may be gathered from a review of 
the case of Rixner’s Succession, 48 La. Ann. 552; 19 So. 597; 32 L. R. A. 
177. In this case the testator was an alien residing at her home in Italy, 
and by will disposed of her property in Louisiana to aliens residing in 
Italy and subjects thereof. It was therefore held that the legatees were 
exempt from the ten per cent tax of Louisiana levied against foreigners 
on succession to property within the State under the provisions of the 
treaty with Italy. (See page 145 hereof for the Treaty.) 

It should be noted that in the Frederickson case that the decedent 
owner was a resident of Louisiana and a citizen of the United States 
and that he disposed of his property located in Louisiana to non-resident 
aliens, and that the court held the treaty did not apply. In the Rixner 
case, however, the owner was a non-resident alien and disposed of her 
property in Louisiana to non-resident aliens, the treaty was held to apply. 
It will be found that many of the treaties do not apply where the dece¬ 
dent owner of the property was a citizen of this state or of the United 
States. 

Mnst-Favored-Nation-CIause—The embryo of this clause seems to 
appear first in a treaty made in November, 1226, in which Emperor Fred- 
« erick II conceded to the city of Marseilles privileges previously granted 


TREATIES WITH FOREIGN NATIONS 


131 


to the citizens of Pisa and those of Genoa. These concessions were prob- 
probably dictated by political motives. The next step appears in the 
treaty between Great Britain and Portugal whereby the subjects of Great 
Britain were given all of the immunities granted to the “subjects of any 
nation whatsoever in league with the Portugals.” This was in 1642. 

After the American Revolution treaties relating to commerce became 
of great importance and the frequency of the appearance of the clause 
greatly increased. However, with the advent of American diplomacy, a 
new construction was put on this “Most-favored-nation-clause.” It was 
held to mean that the advantages granted were to be returned in an 
equivalent grant to our citizens. Am. Journal of International Law, 
Vol. 3, page 395. 

With the establishment of a constitutional form of government in the 
United States, there grew up a new and broader view of citizenship. 
Hepce, it is not strange that some of our early treaties considered the 
rights of our citizens in foreign lands as well as rights pertaining to nav¬ 
igation and commerce. In some of these early treaties the “most-favored- 
nation-clause” appears, but it was not until the early eighties that the 
matter was given its fuller meaning. There have been but very few 
decisions rendered construing this clause in relation to inheritance taxa¬ 
tion. Most of the decisions and difficulties encountered have arisen 
through navigation and commerce. The various views are too extensive 
to be set forth in a work of this character. However, it is well to bear 
in mind that the fact that a treaty with “B nation’*’ wherein special priv^ 
ileges are granted to the United States in return for special privileges 
granted by this nation, does not entitle “C nation” to the same benefits 
given “B nation” under the “most-favored-nation-clause.” The United 
States and Japan adhere to this view of the “most-favored-nation-clause” 
while the European nations are opposed to it- A brief statement of a few 
of our controversies will serve to illustrate the wisdom of the American 
view. 

In 1787 the Netherlands minister protested an Act of the Legislature 
of Virginia which exempted French brandies imported in French and 
American vessels from certain duties to which like commodities imported 
in the vessels of Netherland were liable. John Jay, Secretary for the 
Department of Foreign Affairs replied, in part, to the claim of Nether¬ 
lands under the “most-favored-nation-clause,” “It would certainly be in¬ 
consistent with the most obvious principles of justice and fair construc¬ 
tion, that because France purchases, at a great price, a privilege of the 
United States, that therefore the Dutch should immediately insist, not 
on having the like privileges at the like price, but without any price at 
all.” Secret Journals of Congress, Vol. IV, page 409. 

When we purchased Louisiana from France in 1803, the treaty provided 
that “the ships of F'rance shall be treated upon the footing of the most- 
favored-nation” in the ports of the ceded territory. In 1815, Congress 
passed an act by which the vessels of foreign countries were exempted 
from discriminatory tonnage duties in our ports, provided such countries 
granted reciprocal treatment to American ships entering their ports. 
Great Britain took advantage of this act and exempted our ships. 


132 


COLLATERAL INHERITANCE TAX LAW 


France took no action with the result that when her ships entered our 
ports they were obliged to pay a tonnage duty greater than exacted from 
English ships. In 1817 the French minister called the Department of 
State’s attention to this discrimination and claimed their ships were en¬ 
titled, under the “most-favored-nation clause,” to be classed the same as 
those of Great Britain. This was denied by our Secretary of State, John 
Quincy Adams, who pointed out the fact that “the exemption of English 
vessels is not a free gift, but a purchase at a fair and equal price,” and 
that the treaty “cannot be understood to mean, that France should en¬ 
joy as a free gift that which is conceded to other nations as a full equiv¬ 
alent.” Further that “if British vessels enjoyed, in the ports of Louisiana, 
any gratuitous favor , undoubtedly French vessels would by the terms of 
the article, be entitled to the same.” Am. State Papers, Foreign Rela¬ 
tions, Vol. V, 152-53. | 

This view of the “most-favored-nation-clause ’ finds support in the 
decision of the supreme court of the United States in the case of Bartram 
v. Robertson, (1887) 122 U. S. 116, 30 L. Ed. 1118; 7 Sup. Ct. Rep. 1115. 
In this case the plaintiff sought to recover certain duties exacted on the 
importation of sugar and molasses produced and manufactured on the 
Island of St. Croix, a part of the dominions of the King of Denmark. Pre¬ 
vious to this a treaty, or convention, had been entered into between the 
king of the Hawaiian Islands and the United States whereby this nation 
agreed to admit certain articles into our ports free of duty, including 
sugar and molasses, “for and in consideration of the rights and privileges 
granted by the United States of America” and “as an equivalent therefor” 
the king of the Hawaiian Islands agreed to admit certain named articles 
of American manufacture and growth into the ports of the Hawaiian Is¬ 
lands free from duty. 

The plaintiff claimed he was entitled to a refund as the treaty with 
Denmark provided that the contracting powers would not “grant any par¬ 
ticular favor to other nations in respect of commerce and navigation 
which shall not immediately become common to the other party, who shall 
enjoy the same freely, if the concession were freely made, or upon al¬ 
lowing the salne compensation if the concession were conditional'’ And 
further that “no higher or other duties shall be imposed on the importa¬ 
tion” of articles from the respective nations than are “payable on the like 
articles, being the produce or manufacture of any other foreign country.” 

In summing up the opinion the supreme court says, “our conclusion is, 
that the treaty with Denmark does not bind the United States to extend 
to that country, without compensation, privileges which they have con¬ 
ceded to the Hawaiian Islands in exchange for valuable concessions. On 
the contrary, the treaty provides that like compensation shall be given 
for such special favors. When such compensation is made it will be time 
to consider whether sugar from her dominions shall be admitted free from 
duty. 1 ’ 

This case was followed in Whitney v. Robertson, (1888) 124 U. S. 190; 
31 L. Ed. 386; 8 Sup. Ct. Rep. 456, involving practically the same state of 
facts except that the sugar was imported from the Republic of San Do¬ 
mingo. 


TREATIES WITH FOREIGN NATIONS 


133 


Our government has insisted upon this view from the first and it has 
also recognized the principle that a free gift, or privilege, granted to one 
nation inures to the benefit of all other nations who have a “most-fa¬ 
vored-nation-clause” in their treaty with the United States. The case 
of the American Express Company v. United States, decided by the U. S. 
Court of Customs Appeals, (Dec. Term 1912) illustrates the converse of 
the “sugar cases.” By the Act of July 26, 1911, sec. 2, chemical wood pulp 
and sulphide of wood pulp were admitted free from duty when imported 
into the United States direct from Canada. There was no consideration 
given by Canada , nor any concession granted for this favor. It was there¬ 
for held, under the “most-favored-nation-clause,” that Norway, Russia, 
Austria-Hungary, and Germany were entitled to have their wood pulp 
admitted free of duty as were the products of Canada. Reported also in 
the American Journal of International Law, Vol. 7, page 891. 

Opposed to this is the European view that whenever a favor is granted 
one nation it ipso facto extends the same favor to all other countries 
with which it has the “most-favored-nation” treaties regardless of con¬ 
sideration. However, it has been uniformly recognized that a nation may 
make concessions to one of her colonies without regard to the “most-fa¬ 
vored-nation-clause,” in fact, the clause refers to the “most-favored-for¬ 
eign-nation.' ’ 

It does not necessarily follow that by.virtue of a “most-favored-nation- 
clause” being inserted in a treaty in relation to succession of property, 
that the citizens of that nation may claim similar exemption granted by 
this country to the subjects of a third nation in considertaion of special 
privileges granted to our citizens. Before the citizen of the first nation 
can demand the privileges granted a third nation he must show that his 
nation has granted to the citizens of this country like privileges. 

One writer states “that our view of the business is strictly that of 
quid pro quo; special favor for special favor, with no outsider entitled to 
ask something unless he has given something.” The Nation, Vol. 93, 
page 26. 

Who Are Aliens—Non-Resident Aliens—Our statute provides for a 
higher rate of tax in case of “aliens, who are non-residents of the United 
States. ’ In view of the many changes in allegiance brought about by this 
war, it has been deemed wise to note those who are aliens. 

Not only those who are foreign born are aliens but also our own citi¬ 
zens may by their own acts become aliens. This can be accomplished in 
two ways, 1st, by marriage, and 2nd, by expatriation. Any American 
woman who marries a foreigner shall take the nationality of her husband. 
Sec. 3960, U. S. Comp. St. Vol. 4. “Any American citizen shall be deemed 
to have expatriated himself when he has been naturalized in any foreign 
state in conformity with its laws, or when he has taken an oath of al¬ 
legiance to any foreign state,” Sec. 3959, U. S. Comp. St., Vol. 4. 

This last provision is of vital importance at this time. For instance, 
when a citizen of the United States enters the Canadian or English army, 
he is obliged to take an oath of allegiance to the King of England, and 
thus expatriates himself as a citizen of the United States. In order to 
meet this situation in the present war, Congress has provided a method 


134 


COLLATERAL INHERITANCE TAX LAW 


for repatriation without going through the necessity of taking out natural¬ 
ization papers. See Act of October 5th, 1917, Chap. 68; Sec. 3959-a, U. S. 
Comp. St., Temporary Sup. 1917. 

The United States statute further provides: “When any naturalized 
citizen shall have resided for two years in the foreign state from which he 
came, or for five years in any other foreign state it shall be presumed 
that he has ceased to be an American citizen, and the place of his gen¬ 
eral abode shall be deemed his place of residence during said years. Pro¬ 
vided, however, that such presumption may be overcome on the presen¬ 
tation of satisfactory evidence to a diplomatic or consular officer of the 
United States, under such rules and regulations as the Department of 
State may prescribe. And provided also, that no American citizen shall 
be allowed to expatriate himself when this country is at war.” Sec. 3959, 
U. S. Comp. St. Vol. 4. 

The statutes of the United States thus clearly set forth who is an 
alien. There are two decisions of vast importance in Iowa holding that 
the term “non-resident alien ’ does not mean that the alien must be a 
non-resident of the United States, but rather a non-resident of the State 
of Iowa. In Re Estate of Gill (1890), 79 Iowa 296; 44 NW. 553; 9 L. R. 
A. 126. This decision was reaffirmed in Re Estate of Kennedy (1912), 
154 Iowa 460; 135 NW. 53, wherein it was held that the decedent and 
his wife, who were aliens, although living in Indiana were “non-resident 
aliens” within the meaning of Code sec. 3368. However it will be noted 
the present statute relating to inheritance taxation states “aliens, who are 
non-residents of the United States” 

Burden of Proof—In Case of Alienage—Our supreme court has an¬ 
nounced the rule to be that the one who asserts alienage has the burden 
of proof. State v. Haynes, (1880) 54 Iowa 109; 6 NW. 156. This rule 
was further approved in the case of State v. Chamberlin, (1917) ... Iowa 
..; 163 NW. 430. It is a query whether this general rule is modified 
by sec. 1481-a45, Supplement, 1913, page 126 hereof, which provides that 
that “the words ‘collateral heirs’ shall be held to mean all persons not 
specifically exempt from the tax.” 

Effect of War on Treaties—The question of the effect of the present 
war upon our treaty with Germany has been reviewed by the Attorney- 
General's Office, and the following conclusions reached: 

“1. That the treaty concluded between Germany and the United States 
on December 11, 1871, has not been extinguished by reason of the war, 
but only suspended. 

“2. That in all estates wherein the testate or intestate died prior to 
the declaration of our government of the existence of war between the 
United States and Germany in which a collateral inheritance tax had 
already accrued, then and in that event a tax of only five (5) per cent can 
be assessed and collected. 

“3. In all estates wherein the decedent died since the existence of the 
state of war between the two countries aforesaid, then a tax based upon 
a percentage of twenty (20) per cent of the value of the property or 
interest passing should be assessed and collected, except when the bene- 


TREATIES WITH FOREIGN NATIONS 


135 


ficiary is a brother or sister of the decedent, in which event the tax 
should be at the rate of ten (10) per cent. 

“The foregoing conclusions refer, of course, to estates in which Ger¬ 
man citizens and subjects are interested as collateral heirs.” Opinion of 
the Attorney-General, June 28, 1917. 

The supreme court of the United States in an early case discussed the 
effect of war upon a treaty in the following terms: 

“But there is a still more decisive answer to this objection, which is, 
that the termination of a treaty cannot divest rights or property already 
vested under it. If real estate be purchased or secured under a treaty, 
it would be most mischievous to admit, that the extinguishment of the 
treaty, extinguished the right to such estate. In truth, it no more af¬ 
fects such rights, than the repeal of a municipal law affects rights ac¬ 
quired under it. If, for example, a statute of descents be repealed, it 
has never been supposed that rights of property already vested during 
its existence, were gone by such repeal. Such a construction would 
overturn the best established doctrines of law, and sap the very founda¬ 
tion on which property rests. But we are not inclined to admit the doc¬ 
trine urged at bar, that treaties become extinguished, ipso facto, by war 
between the two governments, unless they should be revived by an ex¬ 
press or implied renewal on the return of peace. Whatever may be. the 
latitude of doctrine laid down by elementary writers on the law of na¬ 
tions, dealing in general terms, in relation to this subject, we are satis¬ 
fied, that the doctrine contended for is not universally true. There may 
be treaties of such a nature, as to their object and import, as that war 
will put an end to them; but where treaties contemplate a permanent 
arrangement of territorial, and other national rights, or which, in their 
terms, are meant to provide for the event of an intervening war, it 
would be against every principle of just interpretation, to hold them 
extinguished by the event of war.” Society for Propagation of Gospel 
v. New Haven, et al., 8 Wheat. (U. S.) 464. 

It was further stated in Chirac v. Chirac, 2 Wheat. (U. S.) 259, “It 
will be admitted that a right once vested does not require, for its pres¬ 
ervation, the continued existence of the power by which it was acquired- 
If a treaty, or any other law, has performed its office, by giving a right, 
the expiration of the treaty or law cannot extinguish that right.” 

Whether agreements regulating commercial intercourse are merely 
“suspended in their operation during the period of the war or revived 
on the restoration of peace, or are definitely terminated if not expressly 
renewed, is a question on which writers of international law are not 
agreed. The practice of nations may, by implication at least, be con¬ 
sidered as in degradation of the doctrine of the revival of such treaties 
proprio vigore .” Crandall s “Treaties, Their Making and Enforcement,” 
2nd Edition, page 451. 

When War Begins and When War Ends—In the “Trading with the 
Enemy Act,” Congress has defined “the beginning of war” as: “Midnight 
ending the day on which Congress has declared or shall declare war or 
the existence of a state of war.” The present war with Germany was 
declared on April 6th, 1917, and with Austria-Hungary on Dec. 7th, 1917. 


136 


COLLATERAL INHERITANCE TAX LAW 


“End of war” as defined by Congress is “the date of proclamation of 
exchange of ratifications of the treaty of peace, unless the President shall, 
by proclamation, declare a prior date, in which case the date so pro¬ 
claimed shall be deemed to be the ‘end of war’ within the meaning of 
this act.” Statutes of U. S., 65th Congress, 1917, Page 412. 

ARGENTINE REPUBLIC—TREATY. 

Article IX. In whatever relates to the police of the ports, 
the lading and unlading of ships, the safety of the merchandise, 
goods and effects, and to the acquiring and disposing of property 
of every sort and denomination, either by sale, donation, ex¬ 
change, testament or in any other manner whatsoever, as also to 
the administration of justice, the citizens of the two contracting 
parties shall reciprocally enjoy the same privileges, liberties 
and rights, as native citizens; and they shall not be charged, in 
any of those respects, with any higher imposts or duties than 
those which are paid, or may be paid, by native citizens, sub¬ 
mitting, of course, to the local laws and regulations of each coun¬ 
try respectively. If any citizen of either of the two contracting 
parties shall die without will or testament, in any of the terri¬ 
tories of the other, the Consul-General or Consul of the nation to 
which the deceased belonged, or the representative of such Con¬ 
sul-General or Consul, in his absence, shall have the right to in¬ 
tervene in the possession, administration and judicial liquidation 
of the estate of the deceased, conformably with the laws of the 
country for the benefit of the creditors and legal heirs. 

Article X. The citizens of the United States residing in the Ar¬ 
gentine Confederation, and the citizens of the Argentine Confed¬ 
eration residing in the United States, shall be exempted from all 
compulsory military service whatsoever, whether by sea or land, 
and from all forced loans, requisitions or military exactions; and 
they shall not be compelled, under any pretext whatever, to pay 
any ordinary charges, requisitions or taxes, greater than those 
that are paid by native citizens of the contracting parties respect¬ 
ively. U. S. Treaties and Conventions, Vol. I, Page 23. 

AUSTRIA-HUNGARY—TREATY OF 1848. 

(Treaty suspended on December 7, 1917, by declaration of war between 
the United States and Austria-Hungary. The Official Bulletin of Decem¬ 
ber 8, 1917, page 5. Also see page 134 hereof.) 

Article I. The citizens or subjects of each of the contracting 
parties shall have power to dispose of their personal property 


TREATIES WITH FOREIGN NATIONS 


137 


within the states of the other, by testament, donation, or other¬ 
wise; and their heirs, legatees and donees, being citizens or sub¬ 
jects of the other contracting party, shall succeed to their said 
personal property, and may take possession thereof, either by 
themselves or by others acting for them, and dispose of the same 
at their pleasure, paying such duties only as the inhabitants of 
the country, where the said property lies, shall be liable to pay 
in like cases. 

Article II. Where, on the death of any person holding real 
property, or property not personal, within the territories of one 
party, such real property would, by the laws of the land, de¬ 
scend on a citizen or subject of the other were he not disqualified 
by the laws of the country where such real property is situated, 
such citizen or subject shall be allowed a term of two years to sell 
the same, which term may be reasonably prolonged according to 
circumstances, and to withdraw the proceeds thereof, without 
molestation, and exempt from any other charges than those which 
may be imposed in like cases upon the inhabitants of the country 
from which such proceeds may be withdrawn. U. S. Treaties and 
Conventions, Yol. 1, page 34. 

BADEN & BAVARIA. (See German Empire.) 

BELGIUM. 

We have a number of treaties with Belgium hut none of them deal 
with inheritance taxation. Article XV. of the Treaty of 1880 provides: 

In the case of the death of any 'citizen of the United States in 
Belgium, or of a citizen of Belgium in the United States, without 
having any known heirs or testamentary executor by him ap¬ 
pointed, the competent local authorities shall give information of 
the circumstance to the consuls or consular agents of the nation 
to which the deceased belongs, in order that the necessary in¬ 
formation may be immediately forwarded to parties interested. 

Consuls general, consuls, vice-consuls and consular agents shall 
have the right to appear, personally or by delegate, in all pro¬ 
ceedings on behalf of the absent or minor heirs, or creditors, 
until they are duly represented. U. S. Treaties and Conventions, 
Voi. 1, page 99. 

BOLIVIA—TREATY OF 1858, Amended and Proclaimed 1863. 

Article XII. The citizens of each of the contracting parties 
shall have power to dispose of their personal goods within the 


138 


COLLATERAL INHERITANCE TAX LAW 


jurisdiction of the other, by sale, donation, testament, or other¬ 
wise, and their representatives, being citizens of the other party, 
shall succeed to their said personal goods, whether by testament 
or ab intestato, and they may take possession thereof, either by 
themselves or others acting for them, and dispose of the same at 
their will, paying such duties only as the inhabitants of the coun¬ 
try where such goods are, shall be subject to pay in like cases. 
And if, in the case of real estate, the said heirs would be prevented 
from entering into the possession of the inheritance on account 
of their character of aliens, there shall be granted to them the 
longest period allowed by the law to dispose of the same as they 
may think proper, and to withdraw the proceeds without moles¬ 
tation, nor any other charges than those which are imposed by the 
laws of the country. U. S. Treaties and Conventions, Vol. 1, page 
117. 

BORNEO—TREATY OF 1850. 

Part of Art. II. The citizens of the United States of America 
shall have full liberty to enter into * * * * all parts * # * * 
of Borneo, and they shall enjoy therein all the privileges and ad¬ 
vantages, with respect to commerce or otherwise, which are now 
or which may hereafter be granted to the citizens or subjects of 
the most favored nation; and the subjects of the Sultan of Borneo 
* * * * shall enjoy in the United States of America all the privi¬ 
leges and advantages with respect to commerce, or otherwise, 
which are now or may hereafter be granted therein to the citizens 
or subjects of the most favored nation. U. S. Treaties and Con¬ 
ventions, Vol. 1, pages 130 and 131. 

BRAZIL—TREATY OF 1828. 

Article XI. The citizens or subjects of each of the contracting 
parties shall have power to dispose of their personal goods within 
the jurisdiction of the other by sale, donation, testament or other¬ 
wise; and their representatives, being citizens or subjects of the 
other party, shall succeed to said personal goods whether by tes¬ 
tament, or ah intestato , and they may take possession thereof, 
either by themselves, or others acting for them, and dispose of 
the same at their will, paying such dues only as the inhabitants 
of the country wherein said goods are shall be subject to pay in 
like cases: and if, in the case of real estate, the said heirs would 
be prevented from entering into the possession of the inheritance 


TREATIES WITH FOREIGN NATIONS 


139 


on account of their character of aliens, there shall be granted 
to them the term of three years to dispose of the same as they may 
think proper, and to withdraw the proceeds without molestation, 
nor any other charges than those which are imposed by the laws 
of the country. U. S. Treaties & Conventions. Yol. 1, page 136. 

BREMEN. (See German Empire.) 

REPUBLIC OF COLOMBIA—TREATY OF 1846. 

Article XII. The citizens of each of the contracting parties 
shall have power to dispose of their personal goods or real estate 
within the jurisdiction of the other, by sale, donation, testament, 
or otherwise; and their representatives, being citizens of the 
other party, shall succeed to their said personal goods or real 
estate, whether by testament or ab intestato, and they may take 
possession thereof, either by themselves or others acting for 
them, and dispose of the same at their will, paying such duties 
only as the inhabitants of the country wherein said goods are 
shall be subject to pay in like cases. U. S. Treaties and Conven¬ 
tions, Yol. 1, page 305. 

While we have a “most-favored-nation-clause”' in our treaty with Colom¬ 
bia, yet it applies only “in respect of commerce and navigation.” 

CONGO—TREATY OF 1891. 

Article II. In all that concerns the acquisition, succession, pos¬ 
session, and alienation of property, real and personal, the citi¬ 
zens and inhabitants of each of the high contracting parties shall 
enjoy in the territories of the other all the rights which the respec¬ 
tive laws accord or shall accord in these territories to the citizens 
and inhabitants of the most favored nation. U. S. Treaties and 
Conventions, Yol. 1, page 329. 

COSTA RICA—TREATY OF 1851. 

Article VIII. In whatever relates to # # # the succession 

to personal estates by will or otherwise, and the disposal of per¬ 
sonal property of every sort and denomination, by sale, donation, 
exchange, testament, or in any other manner whatsoever, 
# * # the citizens of the two high contracting parties shall 

reciprocally enjoy the same privileges, liberties and rights as 
native citizens, and they shall not be charged in any of these 


140 


COLLATERAL INHERITANCE TAX LAW 


respects with any higher imposts or duties than those which are 
paid or may be paid by native citizens. U. S. Treaties and Con¬ 
ventions, Yol. 1, page 344. 

The “most-favored-nation clause*' with Costa Rica is restricted to mat¬ 
ters of commerce and navigation. 

DENMARK—TREATY OF 1826. 

Article VII. The United States and his Danish Majesty mut¬ 
ually agree that no higher or other duties, charges or taxes of 
any kind shall be levied in the territories or dominions of either 
party, upon any personal property, money or effects of their 
respective citizens or subjects, on the removal of the same from 
their territories or dominions reciprocally, either upon the in¬ 
heritance of such property, money or effects, or otherwise than 
are or shall be payable in each state, upon the same, when re¬ 
moved by a citizen or subject of such state, respectively. U. S. 
Treaties and Conventions, Yol. 1, page 375. 

“Most-favored-nation-clause” is limited to “commerce and navigation.*' 

The Supreme Court had occasion to interpret, the foregoing section 
of the treaty with Denmark in the case of Re Estate of Anderson, (1909) 
166 Iowa, 617; 147 N. W. 1098, where the decedent was a resident and 
citizen of Iowa and she left a will bequeathing all her property to resi¬ 
dents of the kingdom of Denmark. The State of Iowa collected the 
higher rate of tax provided , for by section 1481-a Supplement to the Code, 
1913, in case of bequests to non-resident aliens. The devisees objected 
to this tax and contended that they should not be taxed greater than 
citizens of this state in view of the treaty existing between the two 
countries. The supreme court reaffirmed the principle that the tax was 
not imposed upon the property or on the person, but on the right to the 
succession or receipt of property, and therefore there was no tax being 
levied on the property of the devisees. Affirmed, 245 U. S. 170; 38 Sup. 
Ct. Rep. 109; 62 L. Ed. ... 

The case further adhered to the rule announced in Frederickson v. 
Louisiana, 64 U. S. (23 How.) 445; 16 L. Ed. 577, where it was held that 
“the case of a citizen or subject of the respective countries residing at 
home, and disposing of property there in favor of a citizen or subject of 
the other, was not in contemplation of the contracting- powers, and is not 
embraced in the article of the treaty.’* In view of this rule the State 
of Iowa was properly exercising its authority in taxing the transfer 
of the property in this state bequeathed to the residents of Denmark, 
and did not violate any rights acquired by the existing treaty in doing so. 

FRANCE—TREATY OF 1853. 

Article VII, Part of. In all the states of the Union, whose 
existing laws permit it, so long and to the same extent as the said 
laws shall remain in force, Frenchmen shall enjoy the right of 


TREATIES WITH FOREIGN NATIONS 


141 


possessing personal and real property by the same title and in 
the same manner as the citizens of the United States. They shall 
be free to dispose of it as they may please, either gratuitously or 
for value received, by donation, testament or otherwise, just as 
those citizens themselves; and in no case shall they be subjected 
to taxes on transfer, inheritance, or any others different from 
those paid by the latter, or to taxes which shall not be equally 
imposed. U. S. Treaties and Conventions, Yol. 1, page 531. 

France awards to our citizens the same rights granted her citizens, 
provided we grant reciprocal rights to her citizens. This article of the 
Treaty with France was considered in the case of Geofroy v. Riggs, (1890) 
133 U. S. 258, 266, wherein it is stated: “This article, by its terms, 
suspended, during the existence of the treaty, the provisions of the 
common law of Maryland and of the statutes of that State of 1780 and 
of 1791, so far as they prevented citizens of France from taking by 
inheritance from citizens of the United States, property, real or personal, 
situated therein.” 

GREAT BRITAIN—TREATY OF 1899. 

Article I. Where, on the death of any person holding real 
property (or property not personal) within the territories of one 
of the contracting parties, such real property would, by the laws 
of the land, pass to a citizen or subject of the other, were he not 
disqualified by the laws of the country where such real property 
is situated, such citizen or subject shall be allowed a term of 
three years in which to sell the same, this term to be reasonably 
prolonged if circumstances render it necessary, and to withdraw 
the proceeds thereof, without restraint or interference, and exempt 
from any succession, probate or administrative duties or charges 
other than those which ma\y be imposed in like cases upon the citi¬ 
zens or subjects of the country from which such proceeds may be 
drawn 

Article II. The citizens or subjects of each of the contracting 
parties shall have full power to dispose of their personal property 
within the territories of the other, by testament, donation, or 
otherwise; and their heirs, legatees, and donees, being citizens, 
or subjects of the other contracting party, whether resident or 
non-resident, shall succeed to their said personal property, and’ 
may take possession thereof either by themselves or by others; 
acting for them, and dispose of the same at their pleasure, paying 
such duties only as the citizens or subjects of the country where 
the property lies shall be liable to pay in like cases. 


142 


COLLATERAL INHERITANCE TAX LAW 


Article V. In all that concerns the right of disposing of every 
kind of property, real or personal, citizens or subjects of each of 
the high contracting parties shall in the dominions of the other 
enjoy the rights which are or may be accorded to the citizens or 
subjects of the most favored nation. U. S. Treaties and Conven¬ 
tions, Vol. 1, page 774 and 775. 


By agreement of the contracting powers, the treaty between Great 
Britain and the United States applies to the following colonies and pos 
sessions of Great Britain: 


Cape 

Fiji 

Jamaica 
Bahamas 
Trinidad 
Barbados 
Newfoundland 
New Zealand 
Leeward Islands 
Northern Nigeria 
South Nigeria 
St. Vincent 
St. Lucia 
Falkland Islands 
St. Helena 
Sierra Leone 
Gambia 
Labuan 
Mauritius 


Gold Coast Colony 

South Rhodesia 

Australia 

Cyprus 

Ceylon 

Hongkong 

Straits Settlements 

British Honduras 

Grenada 

North Borneo 

British Guiana 

Bermuda 

Lagos 

British New Guinea 

India, including the Native States 

Transvaal 

Orange River Colony 
Basutoland 

Bechuanaland protectorates 


U. S. Treaties and Conventions, Vol. 1, page 777. 

Art. I of foregoing treaty was considered in case of McKeown v. 
Brown, (1914) Treas., 167 Iowa 489; 149 NW. 593, where one James 
Murray, a resident of Franklin County, Iowa, died intestate leaving no 
direct heirs, in fact no heirs appeared to claim the property and . it 
was held to escheat to the State of Iowa. After the payment of the 
debts all that remained was real property located in four different coun¬ 
ties of the State. This property was sold under order of court and 
the proceeds turned over to the Treasurer of State as no heirs appeared 
to claim it. Thereafter Mary Ann McKeown, an alien and a resident of 
Great Britain appeared and claimed to be an heir of the decedent and 
entitled to the proceeds of the estate. The court held that while the 
property escheated to the state of IoWa when no heirs appeared, yet the 
claimant was entitled thereto on proof of heirship. It further held that 
the treaty above quoted prohibited a greater tax than would be levied 
upon the right of succession by a citizen of this state as it is expressly 
provided that the proceeds derived from the sale of real property shall 
be “exempt from any succession, probate or administrative duties or 


TREATIES WITH FOREIGN NATIONS 


143 


charges other than those which may he imposed in like cases upon the 
citizens or subjects of the country from which such proceeds may he 
drawn." Therefore five per cent was the limit to be assessed on right 
of succession to real property by subjects of Great Britain. 

It is proper to tax costs against one claiming property that has been 
ordered escheated to the state, even though the claimant be successful. 

The case of McKeown v. Brown, (1914) Treas., 167 Iowa 489; 149 
NW. 593, had to deal with the matter of the inheritance tax on suc¬ 
cession to real property under the provision of Article One of the fore¬ 
going treaty. The case of In Re Estate of Moynihan, (1915) 172 Iowa 
571; 151 NW. 504, concerned the inheriting of personal property and 
was to be determined according to Article II of the foregoing treaty. 
The supreme court in this case adhered to the rule in the McKeown 
case, supra , and held that five per cent was all that could be lawfully 
taken by the state for the right to inherit personal property. Further¬ 
more the fact that a testator is, or is not an alien, or citizen of this 
country has no bearing upon the question of the assessment of the tax, 
for the treaty specifically provides that the succession, possession and 
disposal of personal property shall be subject only to such restrictions 
as may be placed upon the right citizens of this state in the succession 
to property in like cases. 

Article V of the foregoing treaty is what is known as the “MOST- 
RAVORED-NATION-CLAUSE.” The supreme court had occasion to 
consider this clause in the case of Brown v. Daly Estate, (1915) 172 
Iowa 3<9; 154 NW. 602; wherein it was held that if the terms of any 
treaty with a foreign nation granted to the citizens or subjects of the 
contracting parties any greater privileges or rights than those enjoyed 
by the citizens or subjects of the nation whose treaty contains the 
“Favored-Nation-Clause” that the citizens or subjects of such country 
should be given and allowed to enjoy the same rights as those granted 
to the citizen of the nation whose treaty specifically provided for the 
enjoyment of such privileges. 

Thus, Article X of the treaty with Germany provides that in the 
matter of “successions to inheritances, citizens of each of the con¬ 
tracting parties shall pay in the country of the other such duties only 
as they would be liable to pay if they were citizens of the country in 
which the property is situated or the judicial administration of the 
same may be exercised.'’ Likewise treaties containing similar pro¬ 
visions have been entered into with Honduras (Art. VIII) Nicaragua 
(Art. VIII) and Argentine (Art. IX). Therefore under our treaty with 
Great Britain the subjects of that nation were entitled to the same 
rights as those granted to our citizens under more favorable treaties, 
with other nations. 

Further Art. V does not limit itself to the protection of “the right, 
of disposing” but purports to apply to “all that concerns the right of 
disposing.” The right of the donor to give and the donee to receive the 
gift are interdependent, and are parts of the same thing, and to abridge 
one is to abridge the other. Therefore the right to dispose of and to 
receive property both real and personal are covered by this clause, 


144 


COLLATERAL INHERITANCE TAX LAW 


(see Brown v. Daly Estate, supra) and the State of Iowa cannot col¬ 
lect a tax in excess of that applied to citizens of the state in like cases, 
namely five per cent. 

GERMAN EMPIRE—TREATY OF 1871. 

(This treaty was suspended by the declaration of war made by Con¬ 
gress on the 6th day of April, 1917.) 

Article X. In all successions to inheritances, citizens of each of 
the contracting parties shall pay in the country of the other such 
duties only as they would be liable to pa} r , if they are citizens of 
the country in which the property is situated or the judicial ad¬ 
ministration of the same may be exercised. U. S. Treaties and, 
Conventions, Yol. 1, page 553. 

By a Protocol, consented to by the Senate on April 24, 1872, it was 
further agreed that Article X applied “not only to persons of the male 
sex, but also to persons of the female sex.’ ’ See U. S. Treaties and Con¬ 
ventions, supra. 

GREECE. 

The Treaty of 1902 with Greece makes no provision for exemption of 
any sort in the matter of inheritance. 

See Art. XI, U. S. Treaties and Conventions, Vol. 1, page 858. 

GUATEMALA—TREATY OF 1901. 

Articles I and II are substantially the same as those of Great Britain; 
however, there is no favored-nation-clause in the treaty with Guatemala 
as with Great Britain. U. S. Treaties and Conventions, Vol. 1, pages 
876 and 877. 

HAITI. 

Treaty with Haiti was denounced by that government to take effect 
May 7, 1905. 

HANOVER. (See German Empire.) 

HESSE. (See German Empire.) 

HONDURAS—TREATY OF 1864. 

Article VIII—(Same as Costa Rica.) U. S. Treaties and Conven¬ 
tions, Vol. 1, page 955. 

ITALY—TREATY OF 1871. 

Article XXII. The citizens of each of the contracting parties 
shall have power to dispose of their personal goods within the 
jurisdiction of the other, by sale, donation, testament, or other- 


TREATIES WITH FOREIGN NATIONS 


145 


wise, and their representatives, being citizens of the other party, 
shall succeed to their personal goods, whether by testament or 
ab intestato, and they may take possession thereof, either by 
themselves or others acting for them, and dispose of the same at 
their will, paying such dues only as the inhabitants of the coun¬ 
try wherein such goods are shall be subject to pay in like cases. 

As for the case of real estate, the citizens and subjects of the 
two contracting parties shall be treated on the footing of the 
most favored nation. U. S. Treaties and Conventions, Yol. 1, 
page 976. 

LOUISIANA. 

For a case construing this article of the treaty with. Italy, see the 
case of Rixner’s Succession, (1896) 48 La. Ann. 552; 19 So. 597; 32 L. 
R. A. 177, also see page 130 hereof. 

JAPAN. 

The Treaty of 1894 with Japan is silent as ,to succession to property. 
Citizens or subjects of each nation are given full liberty to enter, travel, 
or reside in any part of the territory of the other nation; and are 
guaranteed full and perfect protection of their persons and property. 
But nothing is said as to inheritances. U. S. Treaties and Conventions, 
Vol. 1, page 1028. 

KONGO. (See Congo on page 139 hereof.) 

MADAGASCAR. (See France.) 

MECXLENBURG-SCHWERIN. (See German Empire.) 

MEXICO. 

Treaties and Conventions with Mexico have been many but at present 
no provision exists as to succession to property. The Treaty of 1831 
contained a provision on such matters but that treaty was suspended 
by the war of 1846-47, and revived in general by the Treaty of 1848, 
but finally denounced by Mexico on November 30, 1881. See Treaties in 
Force, (1904) page 513. 

NEW GRANADA. (See Colombia.) 

NICARAGUA. 

We formerly had a Treaty with Nicaragua placing the citizens of 
the contracting parties on the footing of native citizens but this treaty 
was denounced by Nicaragua, effective October 24, 1902. U. S. Treaties 
and Conventions, Yol. 2, page 1279. 

• 10 


146 COLLATERAL INHERITANCE TAX LAW 

NORWAY. 

The treaty with Norway concerning the effects of deceased persons 
is the same as the treaty with Sweden. See cases thereunder. 

OLDENBURG. (See German Empire.) 

ORANGE FREE STATE. (See Great Britain.) 

PARAGUAY—TREATY OF 1859. 

Article X—Same as Costa Rica, see page 139 hereof. U. S. Treaties 
and Conventions, Yol. 2, page 1367. 

PRUSSIA. (See German Empire.) 

RUSSIA—TREATY OF 1832. 

Article X. The citizens and subjects of each of the high con¬ 
tracting parties shall have power to dispose of their personal 
goods within the jurisdiction of the other, by testament, donation, 
or otherwise, and their representatives, being citizens or subjects 
of the other party, shall succeed to their said personal goods, 
whether by testament or ab intestato, and may take possession 
thereof, either by themselves, or by others acting for them, and 
dispose of the same, at will, paying to the profit of the respective 
governments, such dues only as the inhabitants of the country 
wherein the said goods are, shall be subject to pay in like cases. 
* * * And where, on the death of any person holding real 

estate, within the territories of one of the high contracting par¬ 
ties, such real estate would by the laws of the land, descend on a 
citizen or subject of the other party, who by reason of alienage 
may be incapable of holding it, he shall be allowed the time fixed 
by the laws of the country, and in case the laws of the country, 
actually in force may not have fixed any such time, he shall then 
be allowed a reasonable time to sell such real estate and to with¬ 
draw and export the proceeds without molestation, and without 
paying to the profit of the respective governments, any other dues 
than those to which the inhabitants of the country wherein said 
real estate is situated, shall be subject to pay, in like cases. U. S. 
Treaties and Conventions, Yol. 2, pages 1517 and 1518. 


SAXONY. (See German Empire.) 
SCHAUMBURG-LIPPE. (See German Empire.) 


TREATIES WITH FOREIGN NATIONS 


147 


SERVIA—TREATY OF 1881. 

ARTICLE II. In all that concerns the right of acquiring, possess¬ 
ing, or disposing of every kind of property, real or personal, citi¬ 
zens of the United States in Servia and Servian subjects in the 
United States, shall enjoy the rights which the respective laws 
grant or shall grant in each of these states to the subjects of the 
most favored nations. 

Within these limits, and under the same conditions as the sub¬ 
jects of the most favored nation, they shall be at liberty to ac¬ 
quire and dispose of such property, whether by purchase, sale, 
donation, exchange, marriage contract, testament, inheritance, 
or. any other manner whatever, without being subject to any 
taxes, imposts, or charges whatever, other or higher than those 
which are or shall be levied on natives or on the subjects of the 
most favored state. 

They shall likewise be at liberty to export freely the proceeds 
of the sale of their property, and their goods in general, without 
being subjected to pay any other or higher duties than those pay¬ 
able under similar circumstances by natives or by the subjects of 
the most favored state. U. S. Treaties and Conventions. Yol. 2, 
page 1614. 

SPAIN—TREATY OF 1902. 

The first two paragraphs of Article III of the Treaty with Spain are 
identical to the first two paragraphs of the Treaty with Great Britain. 
The third paragraph varies from that existing with Great Britain and 
is as follows: 

In the event the United States should grant to the citizens or 
subjects of a third power the right to possess and preserve real 
estate in all the States, territories and dominions of the Union, 
Spanish subjects shall enjoy the same rights; and, in that case 
only, reciprocally, the citizens of the United States shall also en¬ 
joy the same right in Spanish Dominions. U. S. Treaties and 
Conventions, Vol. 2, page 1702. 

SWEDEN—TREATY OF 1783. 

The Treaty with Norway is identical with that in force between 
Sweden and the United States. In fact, there is but one treaty and 
that was made with Sweden and Norway before they dissolved their 
union. At the dissolution, each nation affirmed the treaty in so far as 
it was within their power to do so. 


148 


COLLATERAL INHERITANCE TAX LAW 


Article VI. The subjects of the contracting parties in the re¬ 
spective states may freely dispose of their goods and effects , 
either by testament, donation, or otherwise, in favor of such 
persons as they think proper; and their heirs, in whatever place 
they shall reside, shall receive the succession even ab intestato, 
either in person or by their attorney, without having occasion to 
take out letters of naturalization. These inheritances as well as 
the capitals and effects which the subjects of the two parties, in 
changing their dwelling, shall be desirous of removing from the 
place of their abode, shall be exempted from all duty called 
“droit de detraction” on the part of the government of the two 
states, respectively. 

But it is at the same time agreed that nothing contained in this 
article shall in any manner derogate from the ordinances pub¬ 
lished in Sweden against emigrations, or which may hereafter be 
published, which shall remain in full force and vigor. The 
United States, on their part, or any of them, shall be at liberty to 
make, respecting this matter, such laws as they think proper. 
U. S. Treaties and Conventions, Vol. 2, page 1727. 

In Re Estate of Peterson, (1915) 168 Iowa 511; 151 NW. 66; L. R. A. 
1916A, 469, affirmed by the Supreme Court of the United States, (1917) 
38 Sup. Ct. Rep. Ill; 245 U. S. ...; 62 L. Ed. 144, the decedent 
Peterson was a native of Sweden but a naturalized citizen of the United 
States living in Plymouth County, Iowa. He died intestate, unmarried, 
and without any direct heirs. The claimants to his estate were nephews 
and nieces, or their surviving spouses or children, also one nephew 
and one niece who were naturalized citizens living in Illinois and Wis¬ 
consin, respectively. The heirs tendered the sum of $848.95 to the 
treasurer of state, being five per cent of the value of the property. The 
state insisted it was entitled to twenty per cent on the property pass¬ 
ing to the non-resident alien heirs. The heirs objected claiming they 
should all be subject to the five per cent tax. There were other ques¬ 
tions raised, but a statement of the facts out of which they grew are 
not so important as to require detailing here. 

The court in construing the treaty held the words “goods and ef¬ 
fects” included real as well as personal property since the original 
treaty was written in the French language and the terms used in the 
French included real property. It further held that the treaty al- 
allowed the subjects of the contracting powers to receive property “aft 
intestato that is from a decedent who died without having made a 
will. That while the subjects of the two powers could remove prop¬ 
erty from one country to another and “be exempt from all duty, called 
“droit de detraction,” yet the term did not exempt the heirs from pay¬ 
ing the inheritance tax as it is not a tax on the property but on the 
right to take the property of a decedent by will or by virtue of law; 


TREATIES WITH FOREIGN NATIONS 


149 


that the term “droit de detraction” means a right to levy a tax upon 
the removal from one state or country to another of property acquired 
by succession or by virtue of a will. In this state the tax is deducted 
before the property passes, therefore there was no tax on the removal 
of the property, or u droit de detraction .” 

The court further held that there was nothing in the treaty guaran¬ 
teeing uniformity of tax on the right to succession and therefore the 
state could assess non-resident aliens twenty per cent and aliens who 
were naturalized five per cent of value of property on right to succes¬ 
sion thereto. 

This further statement should be made as to the levying of a tax 
droit de detraction ”—suppose the non-resident alien heir did not desire 
to remove the property, or the proceeds thereof, from this state, could 
he successfully maintain that he was entitled to the succession of the 
property free from our collateral inheritance tax for the reason that 
he did not desire to remove the property from this state? The answer 
is clear that he could not escape the tax by such a plea for the tax 
is not on the property or its removal but on the right to succession 
thereto. 

This case was affirmed by the Supreme Court of the United States 

on December 10th, 1917; 38 Sup. Ct. Rep. Ill; 245 U. S.; 62 L. 

Ed. ..., wherein it was held that the treaty merely contracted against 
departure by discrimination, by either of such countries against the 
citizens of the other and their property, but the treaty was not appli¬ 
cable in this case as the decedent was not a citizen of Sweden but of 
the United States (following rule of Frederickson v. Louisiana, 23 How. 
445; 16 L. Ed. 577). 

In the case of Duus v. Brown, tried at the same time as the above 
case and out of the same facts it "was held that Article II of Treaty 
with Sweden relating to the most-favored-nation was restricted by its 
terms to matters of commerce and navigation. 

NORTH DAKOTA. 

In the case of Moody v. Hagen, 162 NW. 704 (N. D), the supreme 
court of North Dakota followed the rule announced in Re Peterson’s 
Estate, supra , where it appeared that the decedent was a citizen of 
the United States, domiciled in Fargo, North Dakota, and wherein one 
Elina A. Skarderud, a subject and resident of Norway was held to be 
subject to the payment of a tax equal to twenty-five per cent as pro¬ 
vided for in case of succession by non-resident aliens. 

North Dakota supreme court followed the case of Re Peterson, supra, 
and approved of it in every respect. They further add, however, that 
the treaty clearly relates only to the rights and privileges of the sub¬ 
jects of the United States in Norway and the subjects of Norway in the 
United States, and those who take or inherit from them. And that in 
this particular case the treaty was in no way applicable, as before 
pointed out, since the decedent was not a citizen of Norway, but of 
North Dakota and of the United States. 


* 150 


COLLATERAL INHERITANCE TAX LAW 


WASHINGTON. 

Both of the foregoing decisions are contra to the holding of the 
Supreme Court of Washington in the case of Estate of Stixrud, 58 Wash. 
339; 109 Pac. 343; 33 L. R. A. (ns) 632, in construing the effects of the 
treaty existing between Sweden and the United States. 

SWITZERLAND—TREATY OF 1850. 

Article V. The citizens of each one of the contracting parties 
shall have power to dispose of their personal property within the 
jurisdiction of the other, by sale, testament, donation, or in any 
other manner; and their heirs, whether by testament or ab in¬ 
testate, or their successors, being citizens of the other party, shall 
succeed to the said property or inherit it, and they may take pos¬ 
session thereof, either by themselves or by others acting for them; 
they may dispose of the same as they may think proper, paying 
no other charges than those to which the inhabitants of the coun¬ 
try w T herein the said property is situated shall be liable to pay in 
a similar case. # * # 

The foregoing provisions shall be applicable to real estate sit¬ 
uated vuthin the states of the American Union, or within the 
Cantons of the Swiss Confederation, in which foreigners shall be 
entitled to hold or inherit real estate. 

But in case real estate situated within the territories of one of 
the contracting parties should fall to a citizen of the other party, 
who, on account of his being an alien, could not be permitted to 
hold such property in the state or in the Canton in which it may 
be situated, there shall be accorded to the said heir, or other suc¬ 
cessor, such terms as the laws of State or Canton will permit to 
sell such property; he shall be at liberty at all times to withdraw 
and export the proceeds thereof without difficulty and without 
paying to the government any other charges than those which in 
a similar case would be paid by an inhabitant of the country in 
which the real estate may be situated. U. S. Treaties and Con¬ 
ventions, Vol. 2, page 1766. 

TONGA—TREATY OF 1886. 

Article II. The citizens of the United States shall always en¬ 
joy, in the dominions of the King of Tonga, and Tongan subjects 
shall always enjoy in the United States, whatever rights, privi¬ 
leges and immunities are now accorded to citizens or subjects of 
the most-favored nation, and no rights, privileges or immunities 


TREATIES WITH FOREIGN NATIONS 


151 


shall be granted hereafter to any foreign state or to the citizens 
or subjects of any foreign state by either of the high contracting 
parties, which shall not be also equally and unconditionally 
granted by the same to the other high contracting party, its citi¬ 
zens or subjects; it being understood that the parties hereto af¬ 
firm the principle of the law of nations that no privilege granted 
for equivalent or on account of propinquity or other special con¬ 
ditions comes under the stipulations herein contained as to fav¬ 
ored nations. U. S. Treaties and Conventions, Vol. 2, pages 
1781-1782. 

TWO SICILIES. (See Italy.) 

WURTEMBEXtG. (See German Empire.) 











TABLE OF IOWA CASES RELATING TO COL¬ 
LATERAL INHERITANCE. 


(Numbers refer to pages where cited in this volume) 

A 

Page 

Adams, Re Rst. of, 167 Iowa 382; 149 N.W. 531. 12 

Anderson, Re Est. of, 166 Iowa 617; 147 N.W. 1098; 52 L. R. A. (ns) 

686; affirmed by United States Supreme Court, 245 S. 170; 38 
Sup. Ct. Rep. 109; 62 L. Ed.41, 128, 130, 140 


B 

Bell, Re Est. of, 150 Iowa 725; 130 N.W. 798. 

Breen, Re Est. of (same as Hoyt v. Keegan, Adm., decided May 13, 


1918), 167 N.W. 521.11, 12, 14, 23 

Brown v. Daly Estate, 172 Iowa 379; 154 N.W. 904. 143 

Brown v. Gulliford, — Iowa —; 165 N.W. 182.33, 34 


C 

Crawford, Re Est. of, 148 Iowa 60; 126 N.W. 775; Ann. Case. 1912B, 

922 . 44 

Culver, Re Est. of, 145 Iowa 1; 123 N.W. 743; 25 L. R. A. (ns) 384 

....12, 22, 23 

Culver, Re Est. of, 153 Iowa 461; 133 N.W. 722.23, 125, 126 

Culver, Re Est. of, 159 Iowa 679; 140 N.W. 878. 23 

D 

Daly’s Estate (same as Brown v. Daly’s Estate), 172 Iowa 379; 154 

N.W. 904 .. 143 

Duus v. Brown (same as Re Peterson’s Est.), 168 Iowa 511; 151 N.W. 

66; L. R. A. 1916A, 469; affirmed 245 U. S. —; 38 Sup. Ct. Rep. 

Ill; 62 L. Ed. 144.128, 130, 148 

F 

Ferry v. Campbell, 110 Iowa 290; 81 N.W. 604; 50 L. R. A. 92.6, 9 

G 

Gilbertson v. Ballard, 125 Iowa 420; 101 N.W. 108; 2 Ann. Cas. 607.. 33 

Gilbertson v. McAuley, 117 Iowa 522; 91 N.W. 788.8, 105 
















154 


COLLATERAL INHERITANCE TAX 


Page 

■Gilbertson v. Oliver, 129 Iowa 568; 105 N.W. 1002; 4 L. R. A. (ns) 

953 .12, 14, 22, 23 

Gould v. Morrow (Re Culver’s Est.) 153 Iowa 461; 133 N.W. 722 

.23, 125, 126 

Gould v. Morrow (Re Culver’s Est.) 159 Iowa 679; 140 N.W. 878.... 23 

H 

Herriott v. Bacon, 110 Iowa 342; 81 N.W. 701.8, 9, 105, 126 

Herriott v. Potter, 115 Iowa 648; 89 N.W. 91. 9 

Hoyt v. Keegan, Ad’m, (decided May 13, 1918), 167 N.W. 521. 

.11, 12, 14, 23 

Hulett’s Estate, 121 Iowa 423; 96 N.W. 952. 38 

L 

Lacey v. Treasurer of State, 152 Iowa 477; 132 N.W. 843. 39 

Lamb v. Morrow, 140 Iowa 89; 117 N.W. 1118; 18 L. R. A. (ns) 226 

.33, 34, 43, 85, 126 

Lewis v. Brown, Treas., — Iowa —; 166 N.W. 99.29, 35 

M 


McGhee, Re Est. of, v. State of Iowa, 105 Iowa 9; 74 N.W. 695..8, 62, 63 

McKeown v. Brown, Treas., 167 Iowa 489; 149 N.W. 593..41, 101, 142, 143 

Montgomery v. Gilbertson, 134 Iowa 291; 111 N.W. 964; 10 L. R. A. 

(ns) 986 . 9 

Morrow v. Depper, 153 Iowa 341; 133 N.W .729. 39 

Morrow v. Durant, 140 Iowa 437; 118 N.W. 781; 23 L. R. A. (ns) 474 

.8, 45, 47, 49 

Morrow v. Smith, 145 Iowa 514; 124 N.W. 316; 26 L. R. A. (ns) 696 45 

Moynihan, Re Est. of, 172 Iowa 571; 151 N.W. 504. 143 


P 

Peterson, Re Est. of, 168 Iowa 511; 151 N.W. 66; L. R. A. 1916A, 

469, affirmed by the Supreme Court of the United States, 38 Sup. 

C't. Rep. Ill; 245 U. S. —; 62 L. Ed. — .128, 130, 148 

Peterson, Re Will of Max, — Iowa —; 166 N.W. 168 (petition for re¬ 
hearing granted) . 43 


R 

Re Est. of Adams, 167 Iowa 382; 149 N.W. 531. 12 

Re Est. of Anderson, 166 Iowa 617; 147 N.W. 1098; 52 L. R. A. (ns) 

686; affirmed by Supreme Court of U. S., 245 U. S. 170; 38 Sup. 

Ct. Rep. 109; 62 L. Ed. — .41, 128, 130, 140 

Re Est. of Bell, 150 Iowa 725; 130 N.W. 798. 33 

Re Est. of Breen (same as Hoyt v. Keegan, Ad’m, decided May 13, 

1918) .11, 12, 14, 23 






















COLLATERAL INHERITANCE TAX 


155 


Page 

Re Est. of Crawford, 148 Iowa 60; 126 N.W. 774; Ann. Cas. 1912B, 

992 ... 44 

Re Est. of Culver, 145 Iowa 1; 123 N. W. 743; 25 L. R. A. (ns) 384 


.12, 22, 23 

Re Est. of Culver, 153 Iowa 461; 133 N.W. 722.23, 125, 12$ 

Re Est. of Culver, 159 Iowa 679; 140 N.W. 878. 23 

Re Est. of Daly (Brown v. Daly’s Est.) 172 Iowa 379; 154 N.W. 904.. 143 
Re Est. of Lamb (Morrow v. Lamb) 140 Iowa 89; 117 N.W. 1118; 18 

L. R. A. (ns) 226.33, 34, 43, 85- 

Re Est. of McGhee, 105 Iowa 9; 74 N.W. 695.8, 62, 63 

Re Est. of Moynihan, 172 Iowa 571; 151 N.W. 504. 143 

Re Est. of Peterson, 168 Iowa 511; 151 N.W. 66; L. R. A. 1916A, 469, 
affirmed by the Supreme Court of the United States, 38 Sup. Ct. 

Rep. Ill; 245 U. S. —; 62 L. Ed. 144.128, 130, 148 

Re Est. of Spangler, 148 Iowa 333; 127 N.W. 625. 46 

Re Est. of Stone, 132 Iowa 136; 109 N.W. 455; 10 Ann. Cas. 1033 

.6, 38, 54 

Re Est. of Wells, 142 Iowa 255; 120 N.W. 713.32, 48 

Re Est. of Wilson (same as Morrow v. Smith), 145 Iowa 514; 124 

N.W. 316; 26 L. R. A. (ns) 696. 45 

Re Hulett’s Estate, 121 Iowa 423; 96 N.W. 952. 38 

Re Max Peterson’s Will, — Iowa —; 166 N.W. 168 (petition for re¬ 
hearing granted) . 43 

Re Weaver’s Estate, 110 Iowa 328; 81 N.W. 603.S, 9, 18 

Ryan v. Hutchinson, Judge, 161 Iowa 575; 143 N.W. 439. 120 


S 

Spangler, Re Est. of, 148 Iowa 333; 127 N.W. 625. 46 

Stone, Re Est. of, 132 Iowa 136; 109 N.W. 455; 10 Ann. Cas 1033 

.... 6 , 38, 54 


W 

Weaver’s Estate, 110 Iowa 328; 81 N.W. 603.8, 9, 18 

Wells, Re Est. of, 142 Iowa 255; 120 N.W. 713.32, 48 

Wieting v. Morrow, 151 Iowa 590; 132 N.W. 193.99, 100, 101 

Wilson, Re Est. of (same as Morrow v. Smith), 145 Iowa 514; 124 

N.W. 316; 26 L. R. A. (ns) 696 . 45 
























SECTIONAL INDEX 


The following sections of the statutes of Iowa relating to collateral 
inheritance are set forth at length in this compilation. 

Code—Code of 1897. 

S.—Supplement 1913. 


Page of this 


Sec. No. Volume Compilation 

1467 Code . 8 

1468 Code .. .... 52 

1469 Code . 74 

1470 Code .105 

1472 Code . 87 

1473 Code . 87 

1474 Code . 88 

1480 Code .120 

1481 Code .125 

1481-a Supplement . 10 

1481-al Supplement . 42 

1481-a2 Supplement . 46 

1481-a3 Supplement . 53 

1481-a4 Supplement . 60 

1481-a5 Supplement . 60 

1481-a6 Supplement . 61 

1481-a7 Supplement . 80 

1481-a8 Supplement . 74 

1481-a9 Supplement . 76 

1481-alO Supplement .105 

1481-all Supplement .106 

1481-al2 Supplement .106 

1481-al3 Supplement .107 

1481-al4 Supplement .122 

14-81-al5 Supplement .122 

1481-al6 Supplement .108 

1481-al7 Supplement . 83 

1481-al8 Supplement . 88 

14Sl-al9 Supplement .120 


Page of this 

Sec. No. Volume Compilation 

1481-a20 Supplement .125 

1481-a21 Supplement . 87 

1481-a22 Supplement . 88i 

1481-a23 Supplement . 89 

1481-a24 Supplement .115 

1481-a25 Supplement . 89 

14i81-n26 Supplement . 54 

1481-a27 Supplement . 75 

14Sl-a28 Supplement . 53 

1481-a29 Supplement . 90 

1481-a30 Supplement . 90 

1481-a31 Supplement . 58 

1481-a32 Supplement .123 

1481-a33 Supplement .124 

1481-a34 Supplement .124 

1481-a35 Supplement .124 

1481-a36 Supplement . 91 

1481-a37 Supplement . 93 

1481-a38 Supplement . 92 

1481-a39 Supplement . 

1481-a40 Supplement .100 

1481-a41 Supplement .100 

1481-a42 Supplement . 41 

1481-a43 Supplement .101 

1481-a44 Supplement .114 

1481-a45 Supplement .126 

1481-a46 Supplement . 5y 

1481-a47 Supplement .126 




























































TOPICAL INDEX 


(Numbers refer to pages) 


Page 


Page 


Appraisement- 


“Ab Intestato”— 

Defined .128, 148 

Actuaries Experience; Tables— 

Tables—use of_110, 111, 113 

Administrators— 

(See Executors) 

Adopted Child— 

Inheritance by . 33 

When exempt from tax..42, 43 
Agency— 

When “within this state” to 


be taxed . ll 

Aliens— 

Who are .133 

Burden of proof of alienage. 134 

What law governs. 40 

Rate of tax when non-resi¬ 
dents . 10 

Ancillary Administration— 

When required . 95 


Effect on right to levy tax.. 28 
Annuity 

Beneficiary liable for tax on 10 
How value and tax deter¬ 


mine .10S 

Ante-nuptial Contracts— 

Srm due under as a debt... 50 
Appeai s— 

From appraisement—proced¬ 
ure . 80 

Appellate procedure .126 

Appraisement Bill— 

Form of . 71 


(See Appraisers) 

Necessity of notice of..6, 9, 64 

Fees for making. 49 

Notice of, etc.... 61 

Notice of time and place of. 65 
Return of service of notice 

of. 66 

Time for appraising real 

property . 74 

Of transferred property.... 74 
Objections to, when filed— 

appeals . 80 

Form of petition objecting 

to . 81 

Of remainders in deferred 
estates—procedure ..105, 10-6 
Of life, term and deferred 

estates .106, 108 

Relief from— 

When granted—procedure 76 
Application for—domestic 

estates . 78 

Requests for foreign es¬ 
tates . 9,6 

When granted to foreign 

estates . 95 

Appraisers— 

(See Appraisement) 
Appointment of, duties, etc. 60 

Fees of i. 49 

Commission to . 60 

Duties of on receipt of com¬ 
mission . 61 

In general—how value is to 

be determined .62, 63 

Duty when value of assets 
doubtful . 63 





























58 


TOPICAL INDEX 


Page 

Procedure when property 


subject to mortgage. 6^ 

Procedure in appraising 

“good will” . 64 

Form of commission to ap¬ 
praisers . 71 

Form of appraisement bill.. 71 
Procedure in cases of life, 


term and deferred estate. 108 

Argentine Republic— 

Treaty with .136 

Assessment and Collection of 
Tax— 

(See Appraisement) 

Reporting of property and 
persons liable for tax.... 52 
Duty of executors to collect 


from heirs. 83 

Treas. of State to receive 

payment of . 83 

Action to collect—nature— 

form of petition.85, 86 

Of remainders, life estates, 

etc.108 

Assets— 

(See Inventory) 


Loss of during administra¬ 
tion—effect . 82 

Delivery of by bank, etc., 

liability . 91 

Marshaling of—prohibited.. 99 

Prorating of .100 

Final reporting of to Treas. 
of State .116 

Attorney Fees— 

When deducted as a debt— 
allowance of . 45 

AUSTRALIA'— 

Treaty with .142 

Austria-Hungary— 

Treaty with.136 

B 


Page 

Bahamas— 

Treaty with.142 

Banks— 

Distribution of joint deposits 45 
Delivery of assets—liability 91 
Stock of subject to tax.. 16, 22 
Deposits in subject to tax 16, 23 
Certificates of deposit in 

subject to tax. 23 

Taxing of joint deposits in. . 25 
Barbados— 

Treaty with .142 

Baustoland— 

Treaty with .142 

Beciiuanaland F'rotectorates— 
Treaty with .142 

Belgium— 

Treaty with.137 

Beneficiary— 

When liable for tax. 10 

Effect of death of before 
testator . 38 

Bermuda— 

Treaty with.142 

BEQUESTS'— 

In payment of debts, etc... 35 

Effect of waiver of. 38 

For cemetery lots, etc., 

when exempt .42, 45 

To executors, etc., when 
Payment of—foreign estates 100 

exempt ... 87 

Bolivia— 

Treaty with .137 

Bonds— 

When “within this state” 

taxed . 14 

Government bonds — when 

taxed . 25 

Condition of to secure pay¬ 
ment of tax.107 

Condition of to secure re¬ 
lease of tax lien. 11 

Conditions and amount of 
.108, 122 


Baden and Bavaria— 
Treaty with .... 


137 




































TOPICAL INDEX 


159 


Page 

Of non-resident administra¬ 


tor . 53 

Borneo— 

Treaty with .138 

Brazil— 

Treaty with .138 

Bremen— 

Treaty with .139 

British Guiana— 

Treaty with .142 

British Honduras— 

Treaty with .142 

British New Guinea— 

Treaty with .142 


C 

Cape— 

Treaty with .142 

Certificate of Deposit— 

Rule as 1 to taxation of. 23 

Ceylon— 

Treaty with .142 

Charitable Institutions— 


When exempt from tax..42, 45 
Children— 

When exempt from tax..42, 43 
Clerk of District Court, Duties 

OF’— 

To make entry in lien rec¬ 
ord .52, 89, 90 

To secure list of beneficiaries 
and real property subject 

to tax . 54 

To forward certified copy of 
list of beneficiaries and 
real property to Treas. of 

State . 54 

To report estates subject to 

tax . 58 

Fees for reporting—how 

paid .58, 59 

To issue commission to ap¬ 
praisers, etc. 60 

To furnish appraisers with 
certified list of assets.... 71 


Page 

When he may apply for ap¬ 
praisement of property.. 74 
Failure to make entry of 


lien . 90 

Duty to keep probate record, 

index, etc. 90 

As to deferred estates, etc.. 106 

Treas. of State to settle dis¬ 
pute as to fees of.124 


To present inheritance tax 
lien records to court.... 124 
To certify costs in cases 
taxed against the State. .125 

Collateral Heir— 

Defined .126 

Collateral Inheritance Tax— 
(See Inheritance Taxation) 

Collateral Inheritance Tax 


Lien Record— 

Contents of—duty of clerk 

to keep .52, 89 

Entries to be made by clerk 90 
Failure to make entry—lia¬ 
bility for . 90 

Contingent Estates— 

Taxation of .114 

Colombia, Republic of— 

Treaty with . 139 

Congo— 

Treaty with .139 

Costa Rica— 

Treaty with .139 

Co N STRUCTION— 


Of inheritance tax statutes. 126 


Conflict between treaty and 

federal statute .128 

Conflict between treaty and 
state statute . 41 

Constitutional Law— 

Notice of appraisement pro¬ 
ceedings necessary . 9 

Double taxation not object- 
tionable to .40 
































160 


TOPICAL INDEX 


Page 

Corporations-— 

To report certain transfers 

of stock to Treas. 92 

Failure to report—penalty.. 93 
Stock of subject to tax.. 16, 22 
Taxation of stock when in¬ 
corporated in more than 

one state . 31 

Charitable corporations, 

when exempt .42, 45 

Educational and religious, 

when exempt .42, 43 

Municipal and political, 

when exempt .42, 46 

County Attorney— 

When he may apply for ap¬ 
praisement of property.. 74 

Duties of, fees, etc.123, 124 

Treas. of State to determine 
conflicting claims for 

fees .124 

When to enforce collection, 

etc.124 

Limitation of authority to 
represent Treas. of State. 126 

Court Costs— 

When to be deducted as 

debt .46, 48 

Against whom taxed.124 

Duty of clerk to certify in 
certain cases.125 


Page 

Appraiser’s fees . 49 

Executor's fees .49 

Family allowance . 49 

Sum stipulated in ante-nup¬ 
tial contract . 50 

Mortgage indebtedness, how 

and when deducted. 50 

For repairs . 50 

Due to non-residents—when 

taxed . 23 

Dequests in payment of to 

be taxed . 35 

Foreign estates, how de¬ 
ducted . 99 

Definitions— 

Ab intestato .\..128, 148 

Debts .5, 46 

Droit de detraction... 128, 148 

Droit d’ auhaine.12S 

Collateral heirs ..126 

Contemplation of death.... 28 

Good will . 64 

Goods and Effects.128 

Most-favored-nation clause . 130 

Person .8, 126 

Public charity . 46 

Succession Tax . 6 

Tangible and intangible... 11 
Value .8, 62 

Denmark-— 


D 

Death— 

Gifts made in contemplation 

of taxed .10, 28 

Estate comes into existence 
at time of and tax then 

accrues . 32 

Effect of death of benefici¬ 
ary before that of testator 3$ 


Debts — 

Defined . 46 

Taxes as debt.5, 47 

Attorney fee—when a debt 43 

Funeral expenses .46, 47 

Court costs .46, 4S 


Treaty with.140 

Treaty with construed.132 

Devisee— 

When liable for tax. 10 

Discharge of Executor— 


Void if tax not paid.. 120, 121 
District Court— 

To enforce payment of 


tax .124, 125 

Jurisdiction of .125 

Droit n’ Aubaine— 

Defined .128 

Droit de Detraction— 

Defined .128, 148 













































TOPICAL INDEX 


161 


Page 

E 

Educational and Religious Cor- . 
PORATTON- 

When exempt from tax.. 42, 43 
Egypt— 

Early inheritance statutes 

of . 5 

Equitable Conversion— 

When real property taxed 

under doctrine of. 18 

Applied to partnership prop¬ 
erty . 21 

Estates— 

(See Assessment and Collec¬ 
tion — Appraisement) 
What ones subject to tax. 10, 41 

Rate of taxation on. 10 

Time when an estate comes 

into existence . 32 

Settlement of void unless 

tax paid .120 

When subject to court costs. 124 
Reporting of when subject to 

tax . 52 

When erroneously taxed re¬ 
fund granted .101, 102 

In Remainder— 

Assessment and taxation of. 105 
How value determined.... 108 
Life and Term Estates— 

How value and tax deter¬ 
mined .108 

Contingent— 

Taxation of .114 

Foreign— 

Bond of foreign adminis¬ 
trator . 53 

Must file inventory and list 

of heirs . 93 

Report to Treas. of State— 

form of . 93 

When appraisement neces¬ 
sary . 95 

Relief from appraisement— 

procedure . 96 

11 


Page 

Deduction of debts. 99 

Distribution of proceeds.... 100 
Executors— 

Liability for tax. 10 

Fees of . 49 

Must report persons and pro¬ 
perty subject to tax....,». 52 
Conditions on appointment 
of non-resident—bond of. 53 
Time for reporting persons 
and property subject to 

tax . 54 

Failure to report heirs and 

real property. 56 

When personal property can¬ 
not be ascertained exten¬ 
sion of time may be grant¬ 
ed to file report. 75 

Duty to pay tax, etc. 83 

Bequest to, when subject-to 

tax . 87 

To deduct tax on legacy be¬ 
fore delivery . 88 

To report assets and liabil¬ 
ities to Treas. of State— 

form of report.115, 116 

Discharge void unless tatf 

paid .120 

Effect of discharge in an¬ 
other state..120 

Effect of discharge before 

tax paid .121 

Exemptions— 

(See Debts) 

When value of estate less 

than $1,000 .8, 42, 43 

When real property ex¬ 
empt .10, 18 

Of adopted child. 33 

Of vested remainders. 39 

In general—statute on. 42 

Husband and wife.42, 43 

Parents and children... .42, 43 
Educational and religious 

corporations .42, 43 

Charitable institutions—hos¬ 
pitals .42, 45 







































162 


TOPICAL INDEX 


Page 

For cemetery lots, mass, 


etc.42, 45 

Municipal corporations ..42, 46 
Political corporations ...42, 46 

Expectancy Tables— 

Use of in determining tax, 

etc.110 


F 

Falkland Islands— 

Treaty with .142 

Family Allowance— 

When deducted as a debt.. 49 

Federal Inheritance Tax— 

When estates subject to... 5 

Not to be deducted as a 
debt .5, 47 

Fees— 

Of attorney—allowance of. 46 

Of appraiser . 49 

Of executor . 49 

Of clerk for reporting 

estates .58, 59 

Of county attorney for col¬ 
lection of tax.123 

Bequests to executors in lieu 
of—effect . 87 

Fiji— 

Treaty with .142 

Forms— 

Acknowledgment of service, 

return of . 67 

Affidavit of service by pub¬ 
lication, return of . 70 

Application for extension of 
time to file inventory. ... 76 
Application for relief from 
appraisement — domestic 

estates . 78 

Application for order to 
serve notice by publica¬ 
tion . 68 

Application for relief from 
appraisement—foreign es- 
states . 96 


Page 

Commission to appraisers 
and appraisement till .... 71 
Notice of time and place of 

appraisement . 65 

Notice of time and place of 
appraisement — unknown 

claimants . 71 

Notice of petition for refund 

of tax .104 

Notice of intention to de¬ 
liver assets to executor.. 92 
Order for service by publi¬ 
cation . 69 

Order granting relief from 
appraisement — domestic 

estates . 80 

Order fixing date of hearing 
on petition for refund.... 103 
Petition objecting to ap¬ 
praisement . 81 

P'etition for collection of 

tax . 86 

Petition for refund of tax.. 102 
Report of beneficiaries and 
real property — domestic 

estates . 56 

Report of beneficiaries and 
assets — foreign estates 93 
Report of assets and liabil¬ 
ities .116 

Return of personal service 

by officer . 66 

Return of personal service— 

by one not officer. 66 

Return of substituted service 67 
Return of service, when ac¬ 
knowledged . 67 

Return of service, when ob¬ 
tained by publication.... 70 1 

France— 

Treaty with .140 

Controversy with over early 

treaty .131 

Funeral Expenses— 

Deducted as a debt of 
estate .46, 47 
































TOPICAL INDEX 


163 


«, Page 

G. 

Gambia— 

Treaty with .142 

German Empire— 

Treaty with .144 

Gifts— 

When taxed .10 

When made in contempla¬ 
tion of death. 28 

Gold Coast Colony— 

Treaty with.142 

“Goods and Effects” — 

Defined .128 

“Good Will”— 

Defined—when subject to 
tax . 64 

Government Bonds— 


Subject to succession tax. . 25 
Grantee— 

When liable for tax. 10 

Grantor — 

Waiver of life estate—effect 33 
Reservation of profits, etc., 


effect . 34 

Transfer of property by un¬ 
der agreement to pay an¬ 
nuity—effect of . 35 

Bequests in payment for tak¬ 
ing care of. 35 

Great Britain— 

Treaty with .141 

Greece— 

Treaty with .144 

Grenada— 

Treaty with .142 

Guatemala— 

Treaty with .144 

H. 

Haiti— 

Treaty with .144 

Hanover— 

Treaty with .144 


Page 

Hesse— 

Treaty withi .144 

Heir— 

When liable for tax . 10 

Collateral heir—defined ... 126 
Unknown heirs liable for 

tax . 41 

Must report property liable for 

tax .53, 54 

History— 

Of inheritance tax . 5 

Honduras— 

Treaty with .144 

Hongkong— 

Treaty with .142 

Hospitals— 

When exempt from tax . .42, 45 
Husband— 

When exempt from tax . .42, 43 


I. 

India— 

Treaty with .142 

Inheritance Tax— 

(See Exemptions—Assess¬ 

ment and Appraisement— 


Estates). 

Early history of. 5 

Federal inheritance tax.... 5 

Kinds of. 6 

Source of early Iowa stat¬ 
utes . 6 

Right of a state to levy.... 7 

First Iowa statute on—con¬ 
struction of. 8 

Property and persons sub¬ 
ject to tax. 10 


Rate of tax—who liable for. 10 
Lien of tax—how released.. 10 
When and to whom paid.... 11 
When tax accrues.... 10, 11, 32 
Effect of ancillary adminis¬ 
tration on right to assess. 28 
Effect of waiver of life es¬ 
tate 


33 

































164 


TOPICAL INDEX 


Page 

When adopted child exempt 

from . 33 

Effect of waiver of bequest. 38 
Effect of reservation of 

profits, etc. 34 

Effect of death of beneficiary- 
before that of testator.... 38 
Double taxation, not uncon¬ 
stitutional . 40 

Unknown heirs, etc., subject 

to . 41 

Loss of assets during admin¬ 
istration—effect . 82 

Effect of delay in collecting. 84 
Nature of action to collect— 

form of petition.85, 86 

/When legacy made charge on 

real estate.87, 88 

Clerk to keep record of es¬ 
tates subject to, etc...89, 90 
Compromise settlements— 

how made .100 

Refunding of tax—when— 

procedure .101, 102 

Assessment and taxation of 

remainders . t,.105, 106 

Taxation of life, term and 
deferred estates ....105, 10*8 
Bond to secure payment of 
tax on deferred estates.. 107 
Assessment of life, term and 

deferred estates .108 

Taxation of contingent es¬ 
tates .114 

District court has jurisdic¬ 
tion over matters of. .124, 125 


As applied to— 

Agencies . 11 

Assets lost during admin¬ 
istration . 82 

Bank deposits ........ 16, 23 

Bequests in payment of 

debt . 35 

Bequests to executors.... 87 
Certificates of deposit.... 23 
Corporate stock .16, 22 


Page 

Corporate stock—when in¬ 
corporated in several 

states . 31 

Debts due to non-residents 23 
Gifts made in contempla¬ 
tion of death. '..... 28 

Government bonds—liber¬ 
ty loan bonds. 25 

Life insurance policies... 32 

Mortgages . 11 

Notes . 11 

Partnership property ... 21 
Froperty owned jointly.. 25 
Property “within this 

state” . 18 

Property transferred un¬ 
der agreement to care 
for grantor during life. 35 
Property to be transferred 
under contract to make 


will ... 37 

I x surance Policies— 

When proceeds subject to 
tax . 32 

Interest— 


Rate of on delinquent tax.. 89 
Inventory— 

Of real property subject to 


tax . 54 

Executor must file. 52 


When additional time for 
filing granted—procedure. 75 
Form of for foreign estates 93 
Iowa— 

Source of inheritance tax 


statutes . 6 

Early statutes on. 7 

Italy— 

Treaty with .144 

J. 

Jamaica— 

Treaty with .142 

Japan— 

Treaty with .145 



































TOPICAL INDEX 


165 


View of most-favored-nation- 


Joint Ownership of Property- 


Jurisdiction— 


L. 

Labuan— 

Treaty with . 

Lagos— 

Treaty with . 

Laches— 

Doctrine of not applicable to 
collection of inheritance 

tax . 

Legatee— 

When liable for tax.... 

Tax to be paid before deliv¬ 
ery of property. 

Leeward Islands— 

Treaty with... 

Liabilities— 

Reporting of to Treasurer of 

State .1 

Liberty Loan Bonds— 

Subject to tax:. 

Lien of Tax— 


How real property released 

from . 

Release of real property 
charged with payment of 


Never barred by delay in 
State’s asserting right to 

collect . 

Life Estates— 



Life Insurance — 


131 

When proceeds of policy sub- 


ject to tax. 

. 32 

25 

M. 



Madagascar — 


125 

Treaty with . 

.145 


Mass — 



Bequest for—when 

exempt 


. 

.42, 45 

142 

Mauritius — 


Treaty with . 

.142 

142 

Mechlenburg-Scii werin- 


Treaty with . 

.145 


Mexico— 


) 

Treaty with . 

.145 

84 

Mortgages — 


When “within this 

state”.. 11 


When to be deducted as debt 51 

10 

Appraisement of real prop- 

88 

erty subject to.. 

. 63 

“Most-Favored-Nation-Clause” — 


Meaning of, in general. 130, 143 

142 

Japanese view of.. 

.131 


European view of. . 

.131 


Municipal Corporation- 


116 

When exempt from 

tax. .42, 46 

25 

N. 



Newfoundland — 


10 

Treaty with. 

.142 

90 

New Granada — 


Treaty with. 


10 

New Zealand — 



Treaty with. 

.142 


Nicaragua — 


88 

Treaty with. 

.145 

89 

Non-Resident Aliens — 



(See Aliens) 



North Borneo — 


84 

Treaty with. 

.142 


North Nigeria — 


33 

Treaty with. 

.142 

34 

Norway— 


106 

Treaty with. 

.142 


































166 


TOPICAL INDEX 


Page 

Notes— 

Taxed when “within this 
state’’. 11 

Notice— 

(See Forms) 

Appraisement, notice of— 

necessity for.6, 9, 62 

Appraisement, notice, service 

and return. 61 

Of time and place of ap¬ 
praisement—form of. 65 

Of application for service by 

publication . 68 

Order for service of by publi¬ 
cation . 69 

Of time and place of 
appraisement — unknown 

claimants . 71 

Of appeal from appraise¬ 
ment—time for filing. 81 

Of intention to deliver as¬ 
sets to executor. 92 

Of application for refund of 
tax.101, 104 

0 . 

Oldenburg— 

Treaty with.146 

Orange Free State— 

Treaty with.146 

Orange Rtver Colony— 

Treaty with.142 

Orders - 

(See Forms) 


P. 


Page 

For failure of executor to file 

reports . 55 

For removal of property 
from state without pay¬ 
ment of tax.....122 

Person— t 

Defined.8, 126 

Who liable for tax.10, 41 

Liability for delivery of as¬ 
sets to executor without 
tax having been paid.... 91 
Personal Property— 

(See Property) 

Life, term and deferred es¬ 
tates in, taxation of.106 

Petition— 

Form of, objecting to ap¬ 
praisement . 81 

Form of, for refund of tax. 102 
Form of, for collection cf tax 86 
Political Corporations— 

When exempt from tax..42, 46 
Procedure— 

(See Assessment and Collec¬ 
tion) 

t 

When additional time re¬ 
quired to file inventory... 75 
For relief from appraise¬ 
ment—domestic estates... 76 
For relief from appraise¬ 
ment—foreign estates.... 96 
By bank, etc., intending to 
deliver assets to executor 

before tax paid. 91 

For refund of tax.101 

On appeal.80, 126 


Paraguay— 

Treaty with.146 

Parent— 

When exempt from tax. . .42, 43 
Partnership Property— 

Taxation of. 21 

Penalty— 


For suppression of will.... 53 
For failure to report prop¬ 
erty and persons subject 
to tax. 53 


Property— 

Reporting of when subject to 

tax . 52 

When “within this state/’ 
statutes and decisions.... 

. 8 , 10 , 11 

Duty of clerk to report When 


subject to tax. 58 

When liable for tax—when 

lien on. 10 

Tangible and intangible, de¬ 
fined . 11 
































TOPICAL INDEX 


167 


Page 


Partnership property, when 

taxed . 21 

Corporate stock, when taxed 

.16, 22 

Corporations incorporated in 

several states. 31 

Debts due to non-residents.. 23 
Bank deposits and certifi¬ 
cates of deposit.16, 23 

Government bonds. 25 

Removal of without payment 

of tax—penalty.122 

Delivery of to executor be¬ 
fore tax paid—penalty.... 92 
Taxation of when jointly 

owned . 25 

Proceeds of insurance policy, 

when taxed. 32 

Public Charity— 

Defined . 46 


R. 

Real Property— 

(See Property) 

When subject to tax—when 

exempt . 10 

Tax a lien on—how* re¬ 
leased .10, 11 

Proceeds of—when taxed... 18 
Partnership real property— 

when taxed. 20 

Conveyance of under agree¬ 
ment to pay annuity. 35 

Reporting of when subject to 

tax.52, 58 

Appraisement of when sub¬ 
ject to mortgage. 63 

Time of appraisement of.... 71 
When charged with payment 

of legacy.87, 88 

Deferred estates in—taxa¬ 
tion of.105 

Referees— 

(See Executors) 

Refunding of Tax— 

When granted—procedure 
and forms for.101, 102 


Page 

Relief from Appraisement— 

(See Appraisement,)— 
Remainders— 

(See Estates) 

Reporting of Property and Per¬ 
sons Subject to Tax— 

(See Assessment and Collec¬ 
tion) 

Rome— 

Early inheritance statutes 


of . 5 

Russia— 

Treaty with.146 


S. 

Saxony— 

Treaty with.146 

S oh aumburg-Lippe— 

Treaty with.146 

Securities— 

(See Assets) 

Servia— 


Treaty with.147 

Service— 

Of notice of appraisement, 

etc.61, 62 

Return of—forms for. 66 

Acknowledgment of—f o r m 

for .67 

Substituted service—f o r m 

for .67 

By publication—form for 

procedure . 68 

Order for service by publica¬ 
tion—form for. 69 

Return of when obtained by 

publication. 70 

On minors, insane and in¬ 
competents . 71 

Sierra Leone— 

Treaty with.142 

South Nigeria— 

Treaty with.142 

South Rhodesia— 

Treaty with.142 

Spain— 

Treaty with.147 




































168 


TOPICAL INDEX 


Page 


St. Helena— 

Treaty with.142 

St. Lucia— 

Treaty with.142 

St. Vincent— 

Treaty with.142 

State— 

Right of state to levy tax... 7 

Effect of ancillary adminis¬ 
tration . 28 

Payment in foreign state no 

bar to collection. 40 

Bonds of—subject to tax.... 25 
iWhen statute of conflicts 

with treaty.40, 41 

Strait Settlements— 

Treaty with.142 

Succession Tax— 

Defined . 6 

Survivorship— 

Effect on inheritance tax.... 25 


T. 

Taxation— 

(See Inheritance Taxation— 
Taxes) 

Taxes— 

Rate of inheritance tax. 10 

Lien of tax. 10 

When deducted as a debt.46, 47 
When due on real property.. 74 

When to be paid. 89 

To be paid to Treas. of State 

by executor, etc. 83 

Interest on delinquent—rate 

of . 89 

When additional time grant¬ 
ed for payment of. 83 

Collection of—petition for— 

form of.85, 86 

Payment of by executor.... 88 

Compromises—how made... 100 
Refunding of—when granted 

—procedure .105 

Time of payment on remain¬ 
ders .105 


Page 

Time of payment on succes¬ 
sion to life and term es¬ 
tates .106 

District court to enforce col¬ 
lection of.124, 125 

Treasurer of State— 

To receipt for tax.10, 11 

When he may apply for ad¬ 
ministration on an estate. 53 
To keep record of estates 

subject to tax. 59 

When he may apply for ap¬ 
praisement of property... 74 
May consent to relief frbm 

appraisement. 76 

May object to appraisement. 80 
May maintain actions for 

collection of tax, etc. 84 

Delay in collecting tax—ef¬ 
fect . 84 

To be notified of intention 

to deliver assets. 92 

Service of notices upon, 

method recommended. 67 

Corporations to report cer¬ 
tain transfers of stock to. 92 
To enforce collection of on 
certain corporate stock... 93 
May compromise certain 

cases—procedure .100 

May require report of assets 

and liabilities.115 

To certify fees due to county 

attorneys .123 

To determine conflicting 

claims as to fees.124 

To be plaintiff in all actions 
to collect tax.125 

Tonga— 

Treaty with.150 

Transvaal— 

Treaty with.142 

Treaties— 

In general— 

Who has authority to make 

or change.127 

Form of—language in which 
written .128 





































TOPICAL INDEX 


Page 

Terms used in making treat¬ 
ies defined.128 

Construction of—when 
treaty conflicts with state 

law 1 . 41 

Construction of—when in 
conflict with federal stat¬ 
ute .128 

Doctrine of case of Freder- 
ickson v. Louisiana—effect 

on . 129 

“Most-favored-nation-clause’’ 

meaning of...130 

W1k> are aliens——federal 

statutes . 133 

Burden of proof of alienage. 134 

Effect of war on.134 

When war begins and ends. 135 


Treaties I With— 

Argentine Republic.136 

Australia .142 

Austria-Hungary .136 

Baden and Bavaria.137 

Bahamas. 142 

Barbados.142 

Baustoland.142 

Bechuanaland Protectorates. 142 

Belgium .137 

Bermuda.142 

Bolivia . 137 

Borneo .138 

Brazil ....138 

Bremen .139 

British Guiana...142 

British Honduras.142 

British New Guinea.142 

Cape .142 

Ceylon .142 

Colombia, Republic of.139 

Congo .139 

Costa Rica.139 

Cyprus.142 

Denmark .140 

Fiji.142 

France .140 

Falkland Islands.142 

Gambia .142 

German Empire.144 

Grenada . 142 


169 


Page 

Gold Coast Colony.142 

Great Britain.141 

Greece .144 

Guatemala .144 

Haiti .144 

Hanover .144 

Hesse .144 

Honduras .144 

Hongkong.142 

India .142 

Italy.144 

Jamaica .142 

Japan .145 

Labuan .142 

Leeward Islands.142 

Logas.142 

Madagascar .145 

Mauritius .142 

Mecklenburg-Schwerin .145 

Mexico. .145 

Newfoundland.142 

New Granada.145 

New Zealand.142 

Nicaragua.145 

North Borneo .142 

Northern Nigeria.142 

Norway .146 

Oldenburg .146 

Orange Free State..146 

Orange River Colony .142 

Paraguay .146 

Prussia .146 

Russia . 146 

Saxony .146 

Schaumburg-Lippe.146 

Servia .147 

South Nigeria.142 

South Rhodesia.142 

Sierra Leone.142 

Spain...147 

St. Helena.142 

St. Lucia.142 

St. Vincent.142 

Strait Settlements.142 

Sweden ...147 

Switzerland .147 

Tonga .150 

Transvaal.142 

Trinidad .142 
























































































170 


TOPICAL INDEX 


Page 


Two Sicilies.151 

Wurtemberg .151 


Trust Companies— 

(See Banks) 

Trustees— 

(See Executors) 

Two Sicilies— 

Treaty with.151 


U. 

United States— 

(See Treaties; 

Inheritance Tax. 5 

Unknown Claimants— 

Notice of appraisement— 

how serve. 71 

Unknown Heirs— 

Estates of subject to tax.... 41 
Utah— 

Inheritance tax statutes cop¬ 
ied from Iowa. 6 


V. 

Value— 

(See Appraisement) 

Defined.8, 62 


Page 

Witnesses may be examined 

as to. 63 

Of life, term and deferred 
estates—how determined. 103 
Vested Remainders— 

When exempt from tax. 33 

W. 

War— 

Effect on treaties.134 

When war begins and when 

it ends.135 

Wife— 

Bequests to—when exempt 

from tax.42, 43 

Will— 

Failure to probate—effect... 53 
Suppression of—penalty for 53 
“Within this State”— 

Meaning of under early stat¬ 
utes . 3 

Present statutes and modern 

construction of.10, 11 

W urtemberg— 

Treaty with.151 

Early treaty with construed. 123 





















9 







































































































4 






































































































































































































































































































AGS 8 
















































